Sharon McDougall - Updated - 5th February 2024 - 3 minutes to read
If your credit score has been affected by problem debt, you may be looking for ways to start rebuilding it and getting on with your financial future. Whether you are still struggling with your debt or have entered into an official debt management or insolvency procedure such as a Debt Arrangement Scheme (DAS), Trust Deed or Sequestration, your credit score will have been adversely affected.
A poor credit score will make it more difficult for you to secure credit such as loans, mortgages and hire purchase agreements. It can also affect your chances of being approved by landlords and even getting some jobs.
Ensure that you are registered on the electoral role as this is where lenders will look to confirm your identity and address, without which they are unlikely to approve you. You can check the electoral role and register to vote at gov.uk/register-to-vote. Or if you are a foreign national and not eligible to vote in the UK you can provide each of the three credit reference agencies (Experian, Equifax and Callcredit) with ‘proof of identity’ such as a UK driving licence or a utility bill which can be attached to your credit file.
Get a rough indication of what your monthly repayments might be under each of our different debt solutions.
Remove any errors from your credit record
Simple mistakes on your credit record can have a big effect on your credit score, so get a copy of your credit record from each of the providers (Experian, Equifax and Callcredit) and carefully check for any discrepancies. If you do notice any errors contact either the appropriate lender or credit reference agency and ask for the mistake to be rectified.
If you apply for any form of credit and get turned down this will be recorded on your credit file and can lower your score. If you then apply for lots more credit from different lenders within a short space of time this can even further affect your score as it can suggest to lenders that you are desperate for credit and thus pose a potentially higher risk.
Often the best way of rebuilding your credit score is by securing credit and then proving that you can pay it back, but with a low credit score simply securing credit in the first place can be difficult. However there are a number of credit cards that are designed for people with bad credit scores. One option is a specialist no frills credit card. These have low credit limits and high APRs, but if you spend a small amount and then pay the balance off in full each month this can help to rebuild your credit score, without getting you into further debt. The other possibility is a prepaid card with a specialist credit builder facility. You preload the card meaning that you can only spend what you have, but you also sign a ‘loan agreement’ which covers the card’s monthly fee. Each month as you pay the fee this will be seen as repaying your ‘loan’, which will then help to rebuild your credit score.
Finally, and somewhat obviously, the best way to rebuild your credit score is to ensure that you make all of your payments in full and on time. Prioritise your necessary payments and ensure that you aren’t spending money on any extraneous outgoings and slowly over time you will see your credit score start to increase.
If you are one of the thousands of people in Scotland who are struggling with problem debts, contact the friendly experts at Scotland Debt Solutions today. We have experience of helping thousands of people just like you to take back control of their financial future, often by writing off a proportion of their debt. Contact us today on 0800 063 9250 and find out how we can help you take charge of your debt and get back into the black.
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Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debtsFind out More
A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.Find out More
A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.Find out More
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