It is generally agreed by experts in the credit repair industry that there are certain measures that anyone can take to improve or repair their credit rating (however, these people – or consultants – usually charge a pretty fee along with their services). When money is short, as it is with everyone who is seeking credit repair, there is a lot you can do yourself for very little cost and in some cases no cost at all.

It is a matter of public record that people who wish to repair their credit rating may be able to do so by considering the following courses of action. Some may be more suitable than others, depending on your circumstances.

Order a Credit Report

Since the new GDPR law came into effect you can now check your credit score for free!

It only takes 60 seconds!

Knowing your credit score is the first step to not having to worry about money.

Get your free credit score now, or learn more in my article here

Review Your Report

Read through the credit report, making sure you understand the terminology which is explained as you go along. These reports generally come with useful notes, and often use symbols denoting things you should be aware of. Just spending half an hour with your report will make you familiar with the language and the terms used. Make a note of anything that you think should be changed. In particular, highlight items which you think could be improved on, or even removed with a bit of time and effort, such as CCJs.

Also watch out for:

  • Wrong information (names, addresses, etc.) which indicate incorrect recording of defaults;
  • Past accounts which are late or have been assigned to debt collectors;
  • Credit accounts which are near or over their agreed credit limits.
  • If you are able to identify any errors or factual mistakes, tackle the people responsible (either the original lender or assigned debt collector or debt purchaser if applicable) in writing (not by phone, as these people are slick talkers and have a habit of fobbing you off).

Apply For Debt Management

Some kind of debt management plan, or even an IVA (individual Voluntary Arrangement) may be appropriate if you have a large amount of unsecured debt which is eating into your monthly income. If you want to deal with that debt permanently, without taking on new debt such as a consolidation loan (this is never a good idea except in special circumstances, as it only causes more problems down the line) then you can consolidate your several accounts into one account which is much smaller.

An IVA will actually write off the majority of your unsecured debt, leaving you with a much smaller sum. This is divided up into (usually) 60 equal payments, to be repaid at the end of every month. It is an excellent way to deal with a large amount of debt permanently. So if you haven’t already applied for debnt management, you can do so by going to our debt help page.

But remember to come back to this page, because there are many other things you can do here which can and will improve or repair your credit rating.

Get A Prepaid Bank Current Account

Get New Credit Accounts
This is quicker than paying off the debt on any delinquent accounts, but you should be doing that as well. Any credit accounts which are being kept in good order, with payments up to date, will improve the look of your credit profile. The problem is that people with poor credit ratings will find it difficult to successfully apply for conventional credit cards once their credit rating has dipped.

No matter. There are cards which are specifically designed for people with bad credit histories, and these are ideal to start the ball rolling. Their APR is very high, but that doesn’t matter because you are not going to use these cards for any reason but to show you can stay within your limits. Borrowing ten or twenty pounds here and there is fine, but you will always pay the full balance every month so you do not incure the big interest rates or attract any late fees.

These cards are not to be used for splashing out, remember: their purpose is to get your credit rating back on track. Their usage will reflect your new squeaky-clean attitude towards money!

We can recommend two such cards for this purpose. These are the Vanquis credit card and the CashPlus Gold Card.

The Vanquis card is designed specifically for people with poor credit who wish to improve or build their credit. Apply for this first. If successful you can always apply for the CashPlus Gold Card later if you want.

With the CashPlus card you are basically guaranteed acceptance, but the Vanquis card is more suitable for purposes of building a credit rating; it is more “prestigious” in the sense that it carries more credibility. The CashPlus card is a prepaid card, designed to give you spending power without credit, and the convenience of being able to buy things without carrying lots of cash around ; the Vanquis card is a genuine credit card in the full meaning.

Don’t apply for the CashPlus card first, because if you are turned down it might jeopardise your Vanquis application. Always apply for the Vanquis first, then the CashPlus, never the other way round!

Early Pension Cash Release

One way of getting cash if you really need it is by unlocking some of the funds in your private pension or company pension scheme. This applies only if you are 55 or over. The sector is heavily regulated and the statutory requirements are strict and change from time to time; so for an up-to-date account of what the requirements are go straight to the early pension cash release website.

We will be updating this page whenever anything of relevance becomes available; we are expecting quite a lot of credit repair help and advice to become available as we come out of recession and the market finds ways of helping people get back on track.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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