Whether you are applying for a credit card, an unsecured loan or even a mobile phone plan, when you fill in the paperwork it is highly likely that the provider will run a credit check on you.
Even private landlords may look at your FICO score as part of their tenant credit reference check.
This can be a problem if you have:
- Missed minimum payments on a credit card
- Got in arrears with council tax or utility bills
- Had a court order or CCJ against you for debt
- Arranged an IVA or Trust Deed in the past
- Been declared bankrupt
What is the FICO score range?
The word “FICO” is an acronym for the Fair Isaac Co and they use data from the main credit reporting agencies to give everyone a score. The range is generally between 300 and 850 and the higher score you have the better.
Anyone with a top FICO score will benefit from the lowest interest rates and the best terms for borrowing money. It seems unfair that one slip up in the past (which may not even have been you fault) can penalise you for up to 7 years down the line.
FICO gets its information from Equifax, Experian and TransUnion credit agencies. They look at your payment history, amount currently owed and what types of credit you have. They even lower your score if they see a lot of new credit applications.
The good news is that talking to Aunt Meg will not be reported to any credit reference agency, so if you’re having problems with debt and need a confidential shoulder to cry on, our chats remain confidential.
How to Boost your Credit Score
If you are nearing the end of a debt repayment agreement, such as an IVA (Individual Voluntary Arrangement) you need to boost your credit score as quickly as possible. Ironically, one of the best ways to improve your credit score is to borrow money! If you owe nothing to anyone, you cannot show you can reliably repay money. Here are some tips.
- Getting a small overdraft from the bank or arranging a credit card with a low credit limit are good ways to start rebuilding your credit history. Make sure you diligently pay off at least the minimum repayment each month and aim to clear the credit card before using it
- again. The whole point is not to get sucked back into debt. Instead, use it to show you are responsible and credit-worthy!
- Don’t apply for too many loans or credit cards at once, or your score will quickly plummet again. Building good credit takes patience and diligence, but you can do it!
- Pay all your bills on time. Set up direct debits for your utility bills, council tax and credit cards and make sure that you always have enough to make the repayments on time. You’ll earn lots of “brownie points” this way and your credit score will quickly start to rise.
Whether you are facing problems with debt or need some wise advice, Aunt Meg can help you get back on track.
We all have financial problems at some stage in our life. Fortunately Aunt Meg has some great ways to stop harassing debt letters, fix affordable repayments, call off the bailiffs and even get debt written off.
Call us today and see how we can help.