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If you have a bad credit
rating or no history, you need to establish a
good credit rating. If you look like a risk, then lenders are
unlikely to help you. In order to know what you are dealing with, it is a
good idea to establish what your credit
rating actually is. There are various reports available, many of them
online, where, for a small fee, you can find out what your credit rating is
together with other information. It is important that you check this
extremely carefully as occasionally there have been instances where an error
has been made. A bad debt may have been wrongly attributed to you, or maybe
there has been confusion between you and somebody else with a similar name.
Very rare instances occur where your name may have been given by somebody
defrauding a company offering credit. You need to get errors removed as
quickly as possible.
There are various ways in
which you can establish credit from
scratch or repair a bad rating. It is important to understand the driving
force behind what makes a lender decide to offer or refuse you credit: risk.
In order to be attractive to creditors you need to have proof that you are a
low risk.
The easiest way is to borrow
small amounts of money and ensure that you pay it back after one month of
interest charges or by paying the minimum amount. This way you prove that
you are reliable, and you can start to
establish credit. Store cards generally have an extortionate interest
charge, petrol cards however tend to be easier to obtain and the amounts
borrowed are quite small and easy to pay back. Once you have one card you
will find it easier to obtain others. Slowly build up the amount you borrow,
always paying it off in regular intervals. This way, you can
establish a
good credit rating and build trust in
your abilities to pay. |
