Your Credit Rating
It is important to realise that getting into arrears will affect your credit rating. The record held by credit reference agencies about you will show that you have failed to make “normal” payments and will also indicate if there are any County Court Judgment(s) (CCJ) against you.
This will affect your ability to get credit. Usually information is held on your reference file for six years, but once you have fully repaid the money owed you can apply to have the details updated and the debt registered as satisfied. However, if you are declared bankrupt the effects on your ability to get credit, a mortgage and the like may be more long term.
How can you improve your credit rating?
Be sure you that are on the electoral register because many lenders use it to confirm your name and address. Many local authorities have started compiling a rolling register for people who have moved, so that you will not have to wait a year until a new list is compiled.
Whenever possible, make sure that you and other family members always make your payments on time. Lenders will see information relating to your other family members when you apply for credit, and this could affect their decision. You can ask the agency to separate the files by completing a disassociation application form.
If you apply for credit and you are turned down, and you make a series of applications for credit in the hope of finding one lender who will give you money. These applications will appear on your credit file and may affect your ability to obtain credit.
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