How to reverse negative effects on your credit report

clock

A bad mark on your credit report can be damaging in many different ways. It can cause problems for you in many areas of your life, such as your ability to take out personal loans, including car loans and mortgages, and even applications for instalment plans, including mobile phone contracts and pay-monthly insurance policies. Whether you know you have negative items on your credit report or aren't sure, there are steps you can take to reverse them.

Checking your credit report

The first step to repairing your credit is to check your credit report. Click here to get your credit report. This allows you to see how lenders see your financial history. It also gives you the chance to correct any errors that might be on your credit report. Often people will find that a simple error is making a big impact on their overall credit score.

A routine check of your credit report can also be an important part of your annual accounting. It will allow you to be secure in the knowledge that no unexpected lines of credit are on there, and that your personal finances are reflected properly.

Fixing problems

If you do find that there are problems on your credit report, or that your credit score is not as high as you would like it to be, there are steps you can take. First off, contact credit agencies to correct any errors. This can help ensure that your report is accurate.

Second, make sure you are on the electoral roll. This will help support any identity checks that may be required. If you have changed address, make sure these are noted on your report. Something as simple as a name change, such as through marriage or divorce, can leave you with a less than ideal score unless you make the connection to your old name and your past credit history. If you have a financial association listed on your credit report that is no longer valid, contact credit agencies to have this removed.

Finally, give your finances an overhaul to begin the credit repair process. Your credit score is constantly changing as your credit behaviour changes. The longer you go with on-time payments and good credit activity, the better your score will be. If you have any defaults listed on your credit report, consider contacting those lenders to discuss payment plans or other ways to clear any bad debts.

Moving forward with good credit

Good credit takes work, both in earning it and in maintaining it. The important things to remember are to keep credit activity going and to never make a late payment. Simply staying away from any loan situation won't be beneficial to your overall score. This is because lenders will use your credit report to predict how you will handle future debts. If you don't have a history for them to use for this prediction, they'll assume the worst.

Of course, if your credit report shows the worst - taking out credit agreements and not paying them in line with your obligations - you will also end up with a low credit score. Making regular on time payments is key to maintaining a great credit score.

More on Management

Smart use of EV batteries will help manage peak demands for energy, National Grid predicts.

Net Zero Festival: Firms urged to put data at the heart of decarbonisation strategies

'You need to start with data', sustainability leaders from National Grid and Schneider Electric urge companies

clock 29 September 2022 • 2 min read
Lights, camera, climate action? How TV and film companies can help drive a low-carbon future

Lights, camera, climate action? How TV and film companies can help drive a low-carbon future

Ecologi's Linda Adams sets out how production companies can reduce their own carbon footprint, and encouraging audiences to tackle theirs

Linda Adams, Ecologi
clock 28 September 2022 • 4 min read
Roger Lewis, head of ESG, Downing LLP

Investment manager Downing LLP nets B Corp status

Company now recognised as a sustainable investor following introduction of green initiatives across its investment platform

clock 28 September 2022 • 1 min read