January 27, 2020 Last updated January 27th, 2020 1,558 Reads share

Why Do I Have Bad Credit and How to Fix It?

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Having bad credit can make it harder to get accepted for a range of different type of loans. For example, if you were applying for bad credit car finance and find yourself being declined, you may want to reassess your credit before you start applying. If you have bad credit you may know exactly where you went wrong over the years or you may not have a clue why.

Missed or Late Payments

One of the most common ways that people have bad credit is from regularly missing or making late repayments within a credit agreement. Multiple missed payments can negatively impact your credit score over time.

Being Declared Bankrupt
Bankruptcy is a legal status which is usually declared by a person who has debts that they cannot pay. Bankruptcy usually lasts for a year but it can stay on your credit file for 6-10 years, depending on how long it takes till you are discharged.

Having a County Court Judgement

A Count Court Judgement or CCJ, is a court order in the UK which is usually put in place if a person fails to pay back money they owe. CCJs stay on your credit file for six years.

Entering into an Individual Voluntary Arrangement (IVA)

An Individual Voluntary Arrangement is a way of dealing with your debts and is an agreement between you and the creditors that you ow debt to. In most cases, you agree a payment schedule of when and how you will pay them back. An IVA usually lasts between 5-6 years.


If you miss a payment that you owe to a creditor, the debt can then turn into a default. This is when a lender decides that you are not going to pay back your debt. A default can stay on your credit file for up to six years.

No Credit History

Many people assume that if they have no credit then they will have a good credit score. However, this isn’t always the case. Credit score are all about history and predicting the future, if you don’t have any borrowing evidence then you may find yourself with bad credit by default.

How Can I Fix Bad Credit?


Fix Any Mistakes on Credit Report
Take a look at your credit report and make sure all your information is accurate and up to date. You should also check your credit history and keep an eye out for any fraudulent activity. If you see anything that doesn’t look right, you can contact your credit reference agency who has provided your credit report.

Register on the Electoral Roll

Even if you don’t care about voting in the UK. It’s a good idea to get yourself on the electoral roll. The electoral roll is a register of everyone in the UK who has registered to vote and also shows your personal information including name and address. Potential lenders can use your personal information to verify that you are who you say you are and prevent any fraudulent activity.

Make Payments on Time and in Full
If you have struggled in the past making repayments, this may not be as easy as it sounds. However, even a few months’ worth of evidence of meeting your repayment schedule can help to increase your credit score.

Dissociate Yourself From Financial Partners You Don’t Need

If you have taken our credit or finance in the past with someone else, you will be financially linked on your credit file. If your credit has expired and your financial partner has a low credit score, its best to remove this link from your credit file. If your financial partner has bad credit, it can be negatively affecting your score.

Avoid Multiple Applications

Usually, many finance lenders and online applications use a soft search application. A soft search provides a check on your credit file which is not recorded and does not harm your credit score. However, a hard search is recorded and multiple hard search applications in a short space of time can cause your credit score to be negatively impacted.



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Hannah Madison

Hannah Madison

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