Maintaining Your Credit File
How to keep a good file and credit rating
You understand your credit file, you know how to improve your credit file so now it is time to maintain a good credit file and keep saving those pounds and shaving those interest rates. The third and final video is below and will give you some top tips which will ensure you continue to manage a healthy credit file. If you’re not a fan of videos, then this blog should give you enough information.
The best way to maintain a good file
It is really important that once your credit file is in a stronger position than it was before, you keep on top of it by:
- making sure you’re paying for everything you owe.
- only taking more credit where you can definitely afford the repayments, otherwise you can put yourself under strain and end up stressing about money. This strain won’t go unnoticed by finance companies and they’re unlikely to lend to you if you don’t have much money left at the end of the month due to debt.
- not maxing out your credit cards or overdrafts - this also gives the impression that money is tight.
- proactively chase any old debts, this shows you really do want to pay back money you own and companies will love to see it!
- checking your file regularly. If you spot any errors or something you don’t recognise make sure you contact the company and question it. It could be a genuine mistake and spotting it early could save you issues further down the line.
What to do if you miss a payment
If you missed a payment it is really important that you speak to the finance provider. Be honest and explain why and, if possible, make the payment there and then. If you are struggling then you can come to an arrangement with the company to get back up to date. The sooner you catch up with payments the better. If it gets to the stage where you haven't paid and then you do nothing about it (effectively burying your head in the sand) you could end up with a "mark" on your credit file which will take 6 years to get rid of. Find out about our bad credit car loans.
Your file is typically updated every 30 days but can take up to 2 months. Every month it will show how you have been making payments for the previous month. The agencies that produce these files (like Experian or Equifax) rely on information from lots of other companies. Companies will send their information about how well you’ve paid your debts to these agencies who will in turn add it to your file. This is why its important your payments are up to date with each company you owe.
Your credit file goes back 6 years. It shows any credit you have taken out and when that agreement finishes it takes 6 years to disappear from your file. This is another reason to keep on top of your payments as any negative credit will take 6 years to drop off your file. Even credit from 5 years 11 months can influence a company’s decision on whether to grant you credit and at what rate to charge you!
From reading this blog and watching all three of our videos you should have a better understanding of what a credit file is, how to improve it and how to maintain a good credit file. By improving and maintaining a good file you should save money on your finance in the long run as companies generally give better rates to those who are likely to pay them back.