The UK-market as it stands has copied the economic trends as most other Western financial super-powers and felt the squeeze on fuel, everyday essentials, and utilities, felt most by the everyday consumer.
This has consequentially brough about an upwards step-change in the amount of credit being taken out, which unfortunately goes hand-in-hand with over-borrowing resulting on occasions in missed payments and a reduction in credit score.
If you Have Accrued Poor Credit, What Can you Do?
If you have seen a decline in your credit rating and fall into the poor or bad credit category, there are a number of things that you could do to try and bring the trajectory of your credit score back into the right direction.
One option could be considering a credit builder card such as thimbl. which is a reputable credit building credit card working in association with Vanquis Bank. Thimbl., similar to Vanquis credit cards for bad credit offer a 29.5%, 39.9% and 59.9% APR credit card. These cards of specifically designed to try and help you build your credit by offering a low initial credit limit, typically around the £1,000 mark with a slightly higher than normal APR % to enable small timely repayments without over-borrowing.
This demonstrates to potential lenders and creditors that you can make small, regular, timely repayments. If you pay over the minimum repayment and keep all other aspects of your credit file in order with sensible spending, you should be able to start rebuilding your credit score within time, which will allow you access to more affordable lines of credit in the future.
When considering a credit building card, it is best practice to shop around and find a reputable card that is owned or in partnership with a bank, such as thimbl., Vanquis credit card, Barclay Card and American Express to name but a few options.
You can check your eligibility with a ‘soft credit’ check which won’t show on your credit file. Hard credit checks do however show on your credit file as a hit-marker that creditors can view, however, they drop-off over time (roughly 6-years). A hard credit check only comes into force when you make the full application for the credit card once you know for certain which card you’d like to opt for. Checking your eligibility for a card and not making an application if you’re eligible won’t trigger the hard credit check, which is good to bear in mind when shopping around for the right option for your financial situation.
What Other Options Are Available to You to Improve Your Credit?
A credit building card is just one potential option to build your credit. Below is a list of other steps you can take to try and ensure you have the best chance of improving your credit score.
- Sign up for Electoral Roll – Signing up to vote is a great way to demonstrate to creditors that you have a fixed abode and a stable line of professional communication regarding your credit via your postal address.
- Check for errors on your credit file – If you spot any potential inaccuracies on your credit file, such as an old postal address or suspicious spending activities you can raise this with your bank or go to an official Credit Rating Agency for advice on next steps to take, to get the issues resolved.
- Create a Budget of your Outgoings and Income – The last point is basic, but essential. To give yourself the best chance of managing your finances well it’s a great idea to breakdown your spend and income so you can see the full picture. You can use apps online to help you work out the breakdown or you can do it manually yourself on Excel, but being comfortable and having visibility on your finances is a perfect way to plan your finances for the future.