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There are some things that will obviously affect your credit rating; failing to make

payments, overloading yourself with debt and Defaults. You probably already know

that these will affect how much of a risk future lenders think you are.

But there are a number of other things that can affect your credit rating and which

may not be so obvious. Here’s a list:

Not having any credit

This may sound bizarre, but not having any credit history can be a reason for a poor

credit rating. Until you’ve successfully shown you can manage a debt, a lender has

no way of knowing if you are likely to make your repayments. That’s why some debt-

free folk, as well as those recovering from a period of bad debt management, often

use a credit builder credit card. By clearing the debt in full each month, they prove

they can be trusted.

Your credit applications

If you want a loan or credit card, the answer is not to apply for every loan you can

see until a lender agrees. Every single time you apply for credit it leaves a footprint

on your credit record and making a lot of applications can make you look risky to

potential lenders. If you’re planning to apply for credit then check you are likely to

qualify before signing up, and only apply to one at a time.

Your partner’s finances

Do you share any financial products with a partner? Maybe a bank account, a

mortgage, a consolidation loan? If you do, then your finances are linked.

If you’ve broken up with a partner then it’s a good idea to close down any shared

accounts and to clear any shared debt as you are likely to be both jointly and

severally liable. That means they can pursue you for the whole amount even though

it is a shared debt.

It’s not beyond repair

The most important thing to remember is that you can fix your credit rating. It’s not a

solid thing; you don’t have a black mark against your name for ever just because you

struggled with debt at one point in your life. A credit rating is fluid and taking control

of your debts will see your score gradually rise. Even former bankrupts can build

their score back up by managing their money carefully for a few years.

If your debts seem out of control and you’re being hounded by creditors then talk to

us. Debt Savvy offer free debt advice and we promise there are no hidden fees or

nasty surprises. We also never judge our clients; we’ve heard it all before and will

simply help you rebuild your finances and stop worrying about debt.