Bad Credit due to Debt

How to reduce the chances of a failed credit check?

Failing a credit check can be a huge disappointment but what can you do to minimise the chance that you will fail? This post looks at what you can do to try to avoid failure and hopefully allow you to get the credit you want.

Check your Credit Report

If you haven’t looked at what is on your credit report then now might be the time to do so. Without knowing what you have you aren’t going to know what your credit is like.

A number of credit reference agencies can provide you with access to your report so you can see the data it contains. One place you could go is Credit Expert who offer a 30 day free trial to new customers. Remember though that at the end of your free trial they will start charging you so you should cancel the trial before then if you don’t want to pay.

Your Credit Score

Some of the credit references agencies can give you a credit score when you subscribe to their service, like the Credit Expert Trial mentioned above. However this may not necessarily be accurate and can differ between the agencies. Also a lender calculates their own score, not just based on your credit report and can include information you provide on the application. If you are an existing customer they may look at how you have maintained your accounts with them as well.

Make sure you provide accurate information

Mistyping your name when applying for credit online can cause a fail as they won’t be able to verify who you are. Double check everything before hitting the next button to make sure what you have entered is correct.

Pay your bills on time

Make sure you pay all your bills on time to avoid any late payments being recorded on your credit file. The easiest way to pay bills is through direct debit meaning you don’t have to remember when they are due. However you do need to remember to have the funds in your bank account so you don’t go overdrawn and end up being charged.

Pay down Debt

If you owe a lot of money then before applying for more credit and possibly over extending yourself, pay down your debts. Too much outstanding debt may cause your application to be declined. I know this is not helpful if you need credit now but if you need credit to repay other credit then you might need to reassess what you are doing.

Check for Inaccurate Data on your Credit Report

If you have checked your credit report then make sure what is on there is actually correct. For example sometimes you may find information has been recorded incorrectly or that a financial association is present to a partner who you are no longer with. Tidy it up and clear things off that shouldn’t be there.

Be smart about applying

If you have a poor credit score then there is no point applying for a card such as one from MBNA. You would be better applying to someone like Aqua Card or Vanquis. However keep in mind that the interest rates on those credit cards are very high. However being sensible with them can help improve your credit rating meaning one day you may be accepted for a lower interest credit card.

Don’t apply for lots of credit in a short space of time

If you have made a lot of applications within a short space of time, wait. Stop for a few months then try again. However if you keep on being declined you should check your credit report to make sure nothing untoward is going on.

Remember that checking your report is usually the best port of call to make sure the information is correct. If you already know you have bad credit then it is probably best not to apply. However there are some sub-prime lenders out there who can help you with getting credit but they come at a cost.

You could check your credit report without charge using Credit Karma. Please see my Credit Karma Review for more information.

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