Maintaining Good Credit Rating

Sometimes, however, problems can arise and it becomes difficult to get a credit card, or any other sort of credit. If this happens to you, the first thing you must do is to find out what information the Credit Reference Agencies have on you. More info.

There are other things, you can do if you run into difficulties, which we will come to, but first of all here's a checklist of things to do to avoid becoming a bad credit risk in the first place.

1. Firstly, and a little surprisingly, it helps to have some credit already. If you've never had credit in your life, the Credit Reference Agencies have no way of knowing how well you manage it. However, don't overdo it, and if you get refused once, resist the temptation to rush out and apply to someone else. At least until you have read the information here.
2. Make sure you are on the Electoral Roll. The Credit Reference Agencies check on this monthly and may assume you are a dodgy person if you are not on it.
3. Be in regular, salaried employment. The self employed have a harder time getting credit. If you are thinking of becoming self employed, get whatever credit you'll need for a good few years ahead before making the plunge.
4. Be married. Not the most romantic reason to get hitched, but marrieds often get credit easier than singletons.
5. Pay your bills on time. Easier said than done, of course. If you are prone to forgetting such things, pay by direct debit wherever possible, but don't only pay the minimum amount on existing credit cards. There is some suggestion that lenders take this to mean you are a bad risk.
6. Don't move house too often. Lenders usually ask how long you have been at an address.
7. Obtain a Notice of Disassociation from people who come up in your Credit Reference files who are not you and who are not financially connected to you. Credit reference companies and lenders are not supposed to assume there is a financial connection between people just because they share the same address, but it does happen. As does being refused credit because of family members' indiscretions.