Become a premium borrower
If you are having trouble getting credit, it could be that you have a bad credit rating. The easiest way to find out what the problem is, is to get in contact with either of the two main credit reference companies in the UK. They offer deals at various times and you can sometimes get your report for free.
You can email them or fill in an online registration form and for a small fee they will send you a copy of your credit files.
It is worth knowing that any bad credit information held on your file including both defaults and CCJ's will be stored on your personal file for six years, even if you have paid the outstanding debts off. This is why during the six years after any default you may be turned down for credit.
If you are having trouble getting credit and don't know of a reason it is worth checking out the information held about you. If you find any information that is wrong, you can send a 'statement of correction' to the agency and all lenders will see your statement.
There are several factors a lender looks at when deciding whether to give you credit or not. These include age, income, and your current debt obligations.
Lenders can also look at family history - for example, it is important if you are estranged from any family members to ask the credit agencies for separate files, so other people's history does not affect your status.
However, your payment history is the main area of your credit history that lenders care about - it accounts for 35% of your personal rating at any one time.
One of the best ways to ensure an improved credit rating is actually to borrow more - as long as you demonstrate that you are able to pay your debt off quickly, the better your rating will become over time.
You might think that closing old bank or credit card accounts with no outstanding payments will simplify your life - however, doing so actively shuts the door on that credit knowledge. In other words, your credit file will not acknowledge cards paid off in full if you close the account.
There are of course specialist lenders who deal with clients who have a bad credit history, even CCJs, so if you are still finding it hard to access the funds there are still options available to you and it can be a foothold on the credit ladder, enabling you to demonstrate your ability to fulfill your obligations to your lender.