Tips to Rebuild Your Personal Credit History

Your personal credit history is the information contained in your credit report – a comprehensive overview of your borrowing that comprises of information from institutions like banks and building societies, credit card companies, loan providers, collections agencies, mobile phone companies and more.

Held by one of the UK’s major credit reference agencies, like Experian, Equifax or TransUnion, your credit report also contains a credit score, rated from ‘poor’ to ‘exceptional,’ which is based on how well you have managed your borrowing in the last six years.

Lenders can access your credit history and credit report to assess the level of risk involved with lending you money, though they must have a valid reason to do so (such as you making an application for credit with them.)

Your credit report is updated with fresh information about once a month and data is held on your report for six years, after which it is removed (and no longer impacts your credit score.)

What kind of things appear in your credit history?

Your credit history, stored in the form of a credit report, contains information like:

  • Personal details, such as birth name, name changes, current address and previous addresses over the past six years.
  • Known financial associations, such as joint mortgages and bank accounts with your past or current partner or spouse.
  • County Court Judgements (CCJ’s,) bankruptcies and Individual Voluntary Arrangements (IVA’s.)
  • Credit information like how much money you owe, who this is owed to and whether you meet your repayments on time or have ever defaulted on an agreement (this could be for any type of borrowing, including mortgages, credit cards, store cards, etc.)
  • ‘Hard searches’ that have been carried out by lenders with whom you have made an application for credit. This type of search is a full examination of your credit history from the last six years and leaves an ‘imprint’ on your file which may make it more difficult for you to borrow money in the future.
  • Fraud committed in your name.
  • Fraud you’ve committed using someone else’s name.

What information does NOT appear in your credit history?

Certain types of information are not held by credit reference agencies and will not appear on your credit report. These include:

  • Current account information (except if you use an overdraft facility.)
  • Savings account information.
  • Student loan information.
  • Details about your employment history or current employer, including your salary or how much you earn if you’re self-employed.
  • Criminal records.
  • Medical records.
  • Driving fines or parking tickets.Council tax arrears.
  • Personal information about gender, religion, ethnicity or sexual orientation.

Can I change the information on my credit report?

No, if the information in your credit history is correct, you can’t make changes to it.

It is possible to ask a credit reference agency to add a note to your report to explain why any arrears were made in the first place on a debt (perhaps due to long-term illness, or if you lost your job.)

If there is a mistake on your report, you can dispute this with the credit reference agency who have to remove it if an investigation deems it to be false.

Remember that information only stays on your report for six years before being erased.

How can I view my credit history?

You can apply to view your credit report through any of the UK’s main credit reference agencies and are entitled to one free copy of it every 12 months from each of the three nationwide credit reporting companies listed in the opening paragraph of this article.

How can I maintain a good credit score?

Preventative action is always better than trying to improve a damaged credit score. You can maintain a healthy credit score in the long term by:

  • Paying your bills on time.
  • Paying off any debts you have as quickly, regularly and reliably as possible.
  • Making some sort of payment against debt, even if the amounts are small.
  • Limiting the amount of borrowing you take out. Every time you request credit, a ‘hard check’ is made by the potential lender that leaves an imprint on your credit history. Too many of these, and you could struggle to secure credit in the future, so if you do need to apply for borrowing, space out your applications with at least twelve weeks between them and thoroughly check that you meet all lending criteria before making your application. You can do this for free via any of the main UK credit reference agencies.
  • Communicating closely with anyone that you share joint borrowing with to make sure repayments are being made and the debt is managed well.
  • Ending any negative financial associations.

How can I rebuild a poor credit history?

Credit scores are graded from ‘poor’ to ‘exceptional.’ If yours is in the lower categories, you may struggle to be approved for loans like mortgages, credit cards and overdrafts along with pay monthly mobile phone contracts and utility provision like gas and electricity.

Happily, there are steps you can take to improve a less than perfect credit score, though many of these will take time to take effect – your poor credit score didn’t happen overnight and won’t be rectified instantly either, though change is possible.

To improve a poor credit score:

  • Check your credit report online via a credit reference agency to determine which factors are negatively impacting it. Check that all details included are correct and appeal against any that you feel are false.
  • Ask to add a note to your report that explains extenuating circumstances for any arrears.
  • Close any unused credit cards, store cards, direct debits or mobile phone contracts.
  • If you can manage it, build up your ‘good’ borrowing by using a 0% interest credit card to prove that you can manage credit successfully over a long period of time.

Taking these steps, along with managing your borrowing sensibly in the long term, should ensure that your credit history remains healthy.

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