Are you finding it hard to obtain credit cards or a loan? Well you are not alone. Millions of UK residents have a low or poor credit score. This could be for various reasons. A disputed bill, loss of your income or even that you have never had credit. In general terms, the higher your credit score the lower the interest rates you shall pay on store cards, credit cards and loans. The reason why companies that do lend and issue credit facilities to people with a low credit score charge a higher APR rate is quite simple, risk to reward. If you have recently been declined by a lender because of your credit score there are products available to get your foot on the ladder so to speak and start to rebuild your credit history and improve your credit score. Within the UK there are a handful of credit card providers that specialize in credit card facilities to help start or rebuild your credit. The credit limits vary from two hundred pounds up to two thousand pounds. Even if you are not on the electoral role or had credit problems in the past these lenders look at each application and not just your credit score. So how can you start to improve your credit rating follow these simple steps: Firstly check your credit rating. Depending what’s on your file shall have an impact in determining whether a lender shall grant you credit and also the amount. By checking your credit score not only do you find out the full facts of what is or is not registered against you but then the opportunity to make sure there are no mistakes and the opportunity to have them removed. Then apply to specialist lenders that have products designed for those with a less than perfect credit history. Whether these are an actual credit card or even new to the market a prepaid MasterCard that you preload funds on to however this card can help rebuild your credit file. Not only are your chances of being accepted far greater but also this stops rejected applications with lenders you may apply to in the future. Credit card companies are in business the same as any other business to make money. Use your card on a regular basis however try to pay the full amount each month to avoid interest charges. Make sure you pay on time. This shall show responsible borrowing on your part and start to build a picture of regular on time payments. Try to avoid spending the credit limit and them just paying in minimum payment which in most cases shall only pay the interest thus never repaying the actual credit amount. The BBC research has stated that only 59% of UK consumers actually repay their balance in full each month leaving millions of consumers repaying only the minimum amount each month and on average would take 30 years for those consumers to repay the full amount. At least try to pay the minimum payment amount plus as much as possible of the actual debt to reduce the period of time to clear the amount. Let’s say you have a balance of £1500.00 pounds and your interest rate per annum is 27%. Your monthly interest payment would be £33.75. If the minimum monthly payment charge is say 5% being £75.00 the actual amount you shall pay off the credit would be £41.25. Based on this it would take you just over 36 months to repay the full credit amount however you would also be paying the interest charge for that period to. Try also not to let credit cards control your finances. Plan ahead and only spend what you know is in your budget. Over time the credit providers shall review your account and your credit score should improve. There is no fast quick fix to obtaining a good credit score. This takes responsible actions on your part. Please note: this website, and the articles and information within it are based on journalistic research. It does not and should not be construed to constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research.
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