Do you know how many times this question is constantly being asked, “I have been declined several times, how to build credit rating?”. To build credit rating also know as building credit score is one of the most important factor when it comes to making a decision on an application either for a mobile phone contract, mortgage, loan, credit cards, renting houses and jobs. Before you want to learn how to build credit rating, you need to understand the important factors that go into a credit check, and how are these information helps lenders to consider you as a low, medium or high credit risk applicant.
For easy explanation we will consider mobile phone contract as our prime example, where the most interesting part is that most of the people in UK (say 80%) do not understand the credit check process and get very upset and angry when they get rejected or declined for a monthly contract and starts to blame the network provider who declined their application. There are 5 major network providers in UK such as 3, T-Mobile, Vodafone, Orange and O2 who uses different credit checking criteria’s for on their monthly contracts, if you get declined in one network it does not mean that you cannot get accepted with other networks. It all depends on what part of the information that is in your credit file is being matched with the network’s credit criteria.
How to build credit rating and what network providers look for in a credit check?
1. Payment History – this part has a high score for your credit check where it checks for on-time and scheduled payments to other lenders that you have signed up with. This gives an indication how you make your monthly committed payments and if your application is to be accepted how you will carry with your new payments. Any missed or late payments stay on your credit file for three years, so try not to miss any monthly payments to keep your credit report clean. In this how to build credit rating guide payment history has the highest position and every lender scores this section high.
2. Current Debt – This part also plays a big importance in making a decision as the network’s will calculate the current debt amount along with the new application amount and work out whether you will be able to re-pay the monthly instalments. The less debt you have the better your chances to pass the credit check. This section is also as important as section 1 of the how to build credit rating process.
3. Address – In UK normally if you live at an address for over 3 years you generally build up a good credit rating as you have registered to the Electoral Roll that helps to fight against fraud. If for any reason you live at an address less than 3 years then try to register yourself on the Electoral Roll or update your credit company with a valid reason why you could not register. Always check the history of an address before you move into a new property as any blacklisted address could create an impact on your application. If you are looking how to build credit rating then your address plays a major part in it.
4. Unused Accounts – Too many people in UK apply for many credit cards, store cards and anything that is related to credit and never use them. If you do not use these accounts is best advisable to close these accounts as network providers while credit checking could take into account the amounts in these unused accounts you could borrow after your application is accepted. The few accounts you have the better you can manage your accounts and your finances. Almost 70% of the UK population do not know that this is one of the most important step in learning how to build credit rating so that you can be accepted for any credit that you apply.
5) Too many Footprints – Each time you apply for any credit such as applying for a pay monthly contract your credit file is cross-referenced with your current credit rating and a footprint of the search is recorded. If the time difference between these searches are very close then this indicate the lender that you are desperate for credit and this could go against you in making a decision. Remember if you are following how to build credit rating steps here then keep this step in mind before doing too many credit check as this could directly have a negative impact on your application.
Are you looking for a quick way on how to build credit rating?
If you have tried several times for a pay monthly contract then do not keep on trying as this could effect your credit rating and will leave footprints on your credit file with each check. With our research we recommend you to take a 30 Day Rolling SIM Only contract as the credit check is minimum and then maintain your monthly payments (say 3 months) to get into the good books of the network and then upgrade to a mobile phone contract. These ”how to build credit rating” tested methods will help you to get your way round the problem and it also increases your chances to build your credit rating.