Once your debts are sorted, you’ll have an opportunity to start rebuilding your credit history. What’s more, you’re likely to have developed strong budgeting skills during your debt solution. That means your credit report will begin to show that you’re managing your bank account responsibly. And even more importantly, all your essential payments are being made on time.

You can boost your credit score further by registering to vote and making sure that your bank accounts etc. are all registered at your current address. You can also try some or all of the tips below…

Rebuild by paying your bills on time

Prioritise paying all your bills in full and on time. This will show potential lenders that they can trust you with their money.

If you’re renting your home, you may be able to boost your credit score simply by paying your rent promptly. This may be an option for both private tenants and social tenants. Schemes you can use to do this include The Rental Exchange and CreditLadder. Sign up to one of these and make your full rent payments on time every week or month as usual. These rental payments will then be reflected in your credit score.

Some utilities providers also pass on information to the credit reference agencies. Ask your providers if they do this. If they do, the credit reference agencies will know whether and when you make your payments. This will help rebuild your credit score if you stay up to date.

But remember, this works both ways. Any missed or incomplete payments will have a negative impact on your credit score.

Rebuild by saving

LOQBOX offer a kind of regular savings account. LOQBOX treat the payments you make into the account as repayments on a loan. They then report these payments to the credit reference agencies. According to LOQBOX, making your agreed payment in full and on time each month should start to boost your credit score after around four months.

Rebuild by borrowing - carefully

If you’re confident in your ability to manage credit carefully without getting into difficulties again, you could consider taking out a credit card (but only once you have completed your debt solution). A credit builder credit card, for example, could help rebuild your credit score as long as you:

keep the balance low (less than half of the credit limit)
pay the full balance each month, so you never have to pay the interest. Credit builder cards tend to come with a high interest rate
remember to pay on time. As with any credit card, you will damage your credit score if you don’t manage to make at least the minimum payment by the due date

Don’t forget that your credit report includes a record of all your applications for credit. So if you try to take out a credit card and you’re turned down, this could suggest to lenders that you’re struggling financially, which will make them less likely to want to lend to you. The same applies if you make a lot of credit applications very quickly. So, apply for credit sensibly. Do your research and try to only apply for cards and loans for which you stand a reasonable chance of being accepted.

test post

New Test Post

Jacob's Test post

scotts blog

We’re encouraging people to speak up about debt ahead of Time to Talk Day on 2 February

Changes to benefits and the state pension in 2023 and beyond