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Bad Credit History
What is a bad credit history?
There are many different reasons you may have a bad credit history which can make it difficult to borrow money when you need to.
Understanding how your credit history is compiled will help you to avoid situations which may result in you earning a negative credit history. There are simple things you can do to keep your credit history clean Bad Credit History
- Pay your bills on time - avoid making late payments on any debts
- Do not miss payments or default on a debt - this includes your council tax
- Pay credit card bills off in full at the end of the month
- Do monitor your accounts for identity theft
- Make sure you fulfil financial contracts or commitments as failure to do so may be reported to credit reference agencies
- Try not to change address or job too frequently as this can affect your credit history
- If you have defaulted on any debts make sure you clean up your credit history as soon as possible by honouring your repayment schedules
- Avoid bankruptcy
Past credit history usually counts for 35% of your credit score. It is not just having County Court Judgements (CCJs) or defaults on your credit report that has a negative impact. Missed and late payments will also dent your score. But whilst negative entries will stay on your credit file for 6 years, the impact of missed and late payments diminishes over time. If you have been making payments on time for at least the last 12 months these positive entries will begin to influence your score less.
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