Your credit rating determines your ability to secure a mortgage, credit cards and many loans. Your credit worthiness with a particular company is formulated using many factors, which include any past dealings you may have had with the company in question, information you have supplied on the application form, and official credit files from the three major credit agencies.
It’s important to do all in your power to improve your personal credit rating. A little while ago we looked at five ideas to improve a bad credit history. In this post we’ll look at other steps you can take to build a good credit rating, whether you have a bad credit history, or you’re attempting to build a decent credit rating from scratch.
Electoral roll and other shared data

Companies like Experian, Equifax and Noddle (formerly Callcredit) all report to credit companies using information about you from the electoral roll, so make sure you’re registered on it, that you’re registered to vote in your local area, and that your address and other details are all up to date. It is unlikely you will be given credit if you are not registered, and even something simple as a wrong house number on your records can cause damage. Also bear in mind that many utility companies not share data about you, so missing a couple of payments to your phone or electricity company may have a detrimental effect on your credit rating.

Build a good credit history

A company rates you on what it perceives to be your ability to pay back, so if you have no credit history, you’re considered a greater risk. To build up a good credit history it’s essential to demonstrate that you can handle credit responsibly. If you have a credit card, make sure you’re never late with payments, and ensure you repay all other forms of credit or loan payments on time and in full. If you miss a minimum repayment more than once this can damage your rating, so if you’re ever facing difficulty in making the minimum payment it’s always a good idea to contact the lender to discuss other options.

Time your applications for credit correctly

Often if you make a lot of applications in a short space of time this can damage your credit rating, so try and space out your applications for credit. Also, whether your earning makes a big difference, so if you anticipate having time off in future, it’s best to apply before you go.
If you have savings, pay off outstanding debts

The amount of outstanding debt you have is taken into account when you make a new credit application, so it’s a good idea to pay off all the debts you can if you do have available savings. One example is the difficulty some people are facing in new mortgage applications by those who have not managed to repay much of their current mortgages.

Never lie on application forms

As tempting as it might be, never lie on application forms, even if you think it might improve your chances of succeeding with the application. If other lenders can’t corroborate the information you have supplied you likely to be rejected anyway, and can adversely affect your credit score.