What is a credit repair company?
A credit repair company is normally a profit making organisation that you should not use under any circumstances.
You should be very wary of any credit repair company which promises to ‘repair’ your credit report. They’ll charge you to do things you can do for free elsewhere. There are a number of impartial, free to use services in the UK that can help educate you about your credit report and financial situation, and how to improve it.
If there is information on your credit report which is incorrect, contact the credit reference agency you are with and ask them to change or remove it. They, will and should do this for free. If the information is accurate but needs explaining, your credit reference agency will help you add a statement to your report, for free.
If you need specialist advice on how to deal with your debts, you can get free help from any number of debt counselling or money advice organisations (e.g. Citizens Advice Bureau, the Consumer Credit Counselling Service, and the National Debt line). Some of the contact details for these are further down the page.
Your credit report is always searched when you apply for credit.
Every bank and financial institution has their own credit scoring systems, they do not use the mainstream Credit Scores as such. A credit search will decrease your credit Score in the short term.
What are they looking for when they look at my credit report?
They are basically looking at your ability to manage your finances and how you’ve been doing recently, and in the past. Also they will look at how much credit you have borrowed, and how much you owe. In addition companies will look out for any missed payments or any outstanding debts that you have not paid. They will have access to all your financial history over the past 6 years. Moreoften than not, they will be more interested in the more recent history, but older information can impact their decision too.
What happens next?
You should bear in mind that a credit search of your report decreases your Credit Score. So you shouldn’t make more than one application at once, and if you get declined, find out why before you make another application. Otherwise your score could decrease again and again, resulting in an adverse effect.
Once you get accepted, and we start seeing that you are making your payments on time and managing your finances, your score will increase again, possibly even higher than it was before because we will have more credit information about you with this new credit account.
Debt can be extremely worrying, and Credit Agencies understand that. With the information in your Credit Report, and helpful guidance from your Credit Agency’s helpline, they could help you understand exactly the situation you are in, and what options you have to improve it.
Get an accurate view of exactly the credit situation you are in.
Log in to your account and check that you’ve given them a full 6 years of address history, and any variations of your address. This ensures they’re pulling all of your credit information into your credit report view.
Make a list of all the debts that you have!
What you’re paying, and how long it would take you to pay it all off based on the current credit offers you have.
Use the Money Advice service credit calculator to help you. This can help you to get a clear view of the situation you are in, what you’re paying back, and what it’s costing you at the moment.
Set yourself a budget
Work out what you could afford to pay back by setting yourself a weekly/monthly budget for all your outgoings.
If you would like further help, you could also speak to one of these free to use, independent debt specialists:
Citizens Advice Bureau – This is a registered charity with more than 700 locations across the UK.
The StepChange Debt Charity – This is a registered charity dedicated to providing free, confidential counselling and money management assistance to financially distressed families and individuals. Phone 0800 138 1111
National Debtline – This is a helpline that provides free, confidential and independent advice on how to deal with debt problems. You can reach them by calling free on 0808 808 4000.