May 5, 2021

Step-By-Step Guidance On Cleaning Up Your Long Credit File

By : Ellie Brown

The long list of credit file gets strenuous at one point in time. Eventually, it creates a bad impact and steals your greater peace of mind. Are you burdened with multiple credit files? It’s time to get rid of the freight, and this article contains some smart ideas to do so wisely.

But before approaching the steps of clearing, you should know what is meant by credit file.

A brief about credit files

A credit file is a common term among the residents of Great Britain. It is typically a collection of the recent loans you have taken and your current financial standing. The details in such a file encompass your immediate borrowings in the last few years, your repayment performance, prepayments made by you, and other issues such as defaults.

Maintaining a clean credit file is essential as it is the first thing any lender evaluates before approving the next loan you have applied for.

In the next segment of this blog, find out some smarter ways to get rid of an overburdened credit file.

How to clean your credit file? – Steps to be followed

Read through the steps, and keep a tab of each to understand the best ways of cleaning up your credit file.

  • Keep your hands-off from credit application for sometime

When you apply for a loan, the lenders perform a hard search on your credit file, leaving a permanent mark on it. If you have made too many credit applications in recent days, it will likely be rejected for credit cards or loans. That’s the alarm when you need to stop for at least six months before making any further loan application.

As an alternative, you may request the lender to make a ‘quotation search’ instead of a full search. It will increase your chance to be accepted without leaving an impression on your credit file. Also, you’ll easily get to know about the interest rate and term of the next loan.

  • Pay-off your existing debts as much as you can

Ideally, your current balance should be 50% or less of the total amount you will be borrowing. However, you can improve your credit profile a little bit if you start paying off the outstanding amount slowly. Opt-in for repayments and avoid expending what you pay-off from the credit cards. Eventually, you’ll see a considerable improvement in your credit file. However, you’ll get loans for bad credit with no guarantor and no broker in this phase.

  • Re-check all the information in your credit file

When you see a bad credit rating in your file, you should always go for analysis. It makes sense to check whether the information inserted there is correct in all aspects. For example, if you find a default there, verify whether it’s recorded correctly.

Otherwise, it may leave a negative impact on your credit file and reduce your ability to get approved. Also, ensure that you are on the electoral roll, as most lenders use that information to verify your address.

  • Close the unused accounts

If you have multiple accounts and a few of them have not been used for long, consider closing them. It’s not wise to leave them open! With several credit accounts in your name, you are leaving yourself vulnerable to frauds. The banks and lenders associated with those accounts may try to resist you, but make sure you are firm in your decision for a better future.

  • Proactively create a positive credit file

To ensure that your next loan application is not rejected because of a poor credit file, here are a few things to adopt –

  • Try not to miss repayments of credit card monthly dues or equated monthly instalments of loans
  • Don’t be late with your credit card or loan repayments
  • Consider borrowing a small loan and repaying sensibly to demonstrate creditworthiness if you don’t have much credit history
  • If you can pay more than the minimum due each month, your credit file will soon improve
  • You may consider a prepaid card for building a credit history. Borrow a small loan and repay within 12months so that it reflects on your credit file that you have paid the debt successfully within the tenure

With these ideas in mind, you can easily create an exciting credit history and improve your credit file rating is little expected time.

An Ending Note

Improving your credit file and reflecting a good credit score is no rocket science. All you need to do is follow a few steps proactively to make things work in your favour on an immediate basis. A better credit file increases your chance of getting a loan in times of exigency. So, don’t wait for a hard time. Start off today!

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