Credit History

Lots of people at some point in their lives struggle with their bills and can miss payments, whether it be on loans, credit cards, utility bills -you name it! The problem is that when this happens, sometimes through no fault of your own, you end up with a poor credit record. Maybe you even have a County Court Judgement (CCJ) against you. This can often mean that getting credit is difficult, be it a credit card or a loan or even signing up for a mobile phone or book club.

So is there anything you can do? Fortunately yes - and here are the steps I recommend:

1. Pay your bills on time
It is often easy to miss payments on loans or cards but if you simply make the monthly minimum payment this will ensure your credit record is without blemish. Whenever you apply for any form of credit this payment history is examined by the finance provider and any missed payments will count against you. Easy? yes but what if you have already missed lots of payments and your credit record is already poor?

2. Assess your situation
If your looking to take out a finance product make sure you can afford the repayments. The reason banks look at your past history is that they do not want to lend money to people who do not pay them back - irregular payments make a bad risk. So why not check your credit record? Banks, like everyone else make mistakes, so its well worth checking your credit record to make sure any information held is accurate. It could be that the bad history is from a spouse or relative who you no longer have a financial connection with or they have simply got their details wrong.

You can get a free30 day trial of the credit expert monitoring service provided by Experian. This lets you access and keeps you updated of all the information on your credit file - the same credit file that lenders and other institutions use to evaluate your credit applications. Its provided in a simple easy to read format and allows you to make sure that decisions are made by correct information about you.

If you don't want to check your credit report online I suggest you contact Equifax or Experian - these are the two main credit scoring bureaux. It costs £2 to get a copy of your record and this will list all the credit information banks use to evaluate credit applications. You should write with your details and a cheque or postal order for £2 to Equifax, Experian or both of the following:

Equifax
Credit File Advice Centre
PO Box 1140
Bradford
BD1 5US
Tel: 08705 143700

Experian Ltd
Consumer Help Service
PO Box 8000
NOTTINGHAM
NG1 5GX
Tel: 0870 241 6212

Once you have this information you should know whether you have good or bad credit history. If its good then you should have few problems. If it's bad read on....

3. Consolidate Your Debt
The first thing to do when you have poor credit history is to start making it right again. One way to do this is to make sure you pay the minimum amounts you have outstanding on your debt. Sometimes if you have high outstanding debt you will struggle to repay it due to the high minimum repayments necessary. This is where a personal loan can be useful to consolidate that debt. For example an Alliance & Leicester Personal Loan would cost you only 6.4% APR compared to many credit cards with rates as high as 18.9%. You can also spread the payment over a longer period of time so you lower the monthly payment you make - allowing you to meet all your outstanding credit. Make sure you use the loan to pay off debt and cut up those cards. Its all too tempting to spend on them again and you could find yourself in a much worse position. Click here to compare UK personal loans

4. Understand Credit Scoring
So you have a bad credit record so its all over right? Wrong. When you apply for credit your past history is only part of the calculation. They also take into account things like, how much you earn, how secure your job is, if you own your own home, if you have a bank account, how old you are, if your married and a multitude of other things. The exact way this works is a secret each bank or finance provider keeps very close to their chest. But the good news is that each and every company has a different method for assessing credit card applications so even if one doesn't accept you another might. Another common misconception is that if a card has low rates it has a very stringent credit screening process. Capital One have a 0% deal so click here to apply. If one of these does accept you (don't forget if one rejects you the other might not so bookmark this page!) then you are able to transfer any outstanding debt to these cards and pay no interest - use this time to get your finances in order and pay your bills on time so that when you need to move the balance again you'll have no problems! If you get rejected for all other cards then there are still options.

5.Credit Builder Products
There are credit cards on the market that are perfectly happy to accept people with bad credit histories even if you have county court judgements against you. Many of these have extortionate interest rates which can often put people who are struggling to handle their debt into even more problems. That's why we recommend the Capital One Classic MasterCard.

If you get no success with the Citibank card the Capital One Classic MasterCard could be for you. Firstly and most importantly there's no annual fee so it doesn't cost you anything. You should be accepted even if you have been declined for other cards. Once you get the card all you need do is manage it in a reliable way and do the things outlined here i.e. make sure you pay your minimum monthly amounts on time every month. In 6 - 12 months time your credit record will show a reliable person who pays on time- all the time. That is the time when you can start applying for the cards with the lower rates and really start sorting out your credit problems. To apply for the Capital One Credit Builder Classic Card.