Bad Credit Rating – What To Do

Bad credit rating

If you have a bad credit rating that may be the result of badly managed credit card bills or loans that you are unable to keep up, or other reasons, don’t worry. You can take steps to repair it.

Change Your Habits For Good

Before you do anything, you must ensure that you change your spending habits for good. Even though this guide will show you a number of ways to improve your credit rating if it is bad, none of this will be important if you do not take responsibility for your finances and debt. If you don’t make any changes to your habits, you will undo all the good work you achieve.

In simple terms this means that:

  • if you have a credit card, try to pay off the credit amount every month.
  • if you have a loan or mortgage, make sure you make the required payment at the required time.
  • if you have any other kind of loan or credit agreement, make sure you are fulfilling your side of the arrangement.

If you are in any doubt, speak to your lender to clarify exactly what you need to play and win.

Here are some actions you can take to turn around your bad credit rating and make you more appealing to potential lenders.

Check Out Your Credit Report

Get hold of a copy of your credit report from a credit reference agency and make sure your name and address details are fully up to date. This means checking any name changes have taken place and are current on your credit files – eg maiden or married name changes, etc.

Also make sure that your current address is shown on the file and that credit reference agencies are not checking against an old address


After you have obtained your credit history from a credit reference agency, you should also make sure that all the details are correct and up to date. In particular, make sure that there are no records of debts that you have paid off or closed. Although credit reference agencies will have notes of the previous loans, you should make sure that the records show these debts have been completed.

Electoral Roll

An essential action to help you improve your credit score is to ensure that you are on the electoral role at your current address and that your details are accurate and up to date. Inaccuracies such as incorrect house numbers can cause significant detrimental effects to your credit rating.

Notice Of Correction

If you have missed payments in the past which have affected your credit rating, you can take advantage of a ‘notice of correction’ that is provided by credit reference agencies. These allow you to explain why a period of bad credit performance arose, such as payments that were missed on a loan. Make use of this facility because it can often provide potential lenders with detailed information about your history and circumstances that they may not be able to see from a simple rating score.

Outstanding Debts

To improve your credit rating, where are the most important steps you should take is to make sure you pay off any outstanding debts as soon as you are able. This is particularly important if you have missed payments or only made partial payments in the past.

Don’t Let History Repeat Itself

It is very easy to run up debts and/or lose control of your finances – whether it be through overspending and not making payments to loans, or running up credit card bills that when you know you will be unable to pay. Whatever the reason, you must try to act in a disciplined way when it comes to spending money. Very simply, this means not spending money that you do not have. Shopping sprees have to be paid for at some stage; so do new cars, new telephones, holidays etc. If you do not change your habits and make sure you only spend what you can afford, you will end up in the same situation and have to make drastic repairs to your credit rating. This could affect your potential together mortgage or credit in the future.