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March is National Bed Month – a month dedicated to helping the people of the UK getting a decent kip. There are many reasons why people don’t sleep well – sore back, dreams about robot clowns, or worrying about personal finances.

One of the biggest financial worries people have is their credit rating and if they’ll ever get accepted for credit again. Consumers often have several credit cards or loans, and this can lead to a bad credit rating.

Fear not – I have soothing words of wisdom to make sure your credit rating doesn’t spoil your slumbers.

The first thing to do is check your current credit rating. Be calm, my friend – you might not even have anything to worry about.

How to check your credit rating

It’s pretty easy to find a company that lets you check your score and see if your details are being reported correctly. A lot of these services can also help you improve your score, spot mistakes in your history and help you find the best deals. Have a look at my Credit Report section – wisdom awaits.

What is a credit rating and how does it affect me?

When you go to a lender for a personal loan, credit card, mortgage or any kind of borrowing, your credit rating is used to decide whether you application is successful or not.  

A bad rating can make your life much harder when looking for credit. As well as this, a lot of providers will only give the best deals to a certain percentage of customers with good scores.

That seems pretty straightforward, but alas it’s not. You might be accepted by one lender, but rejected by another because different lenders will use different criteria to work out your credit score.

Whilst having a bad credit rating is never good karma, don’t worry, there are ways of improving it. Here are my top tips:

Get rid of those old credit cards

Improving your credit rating is all about the little things – something as small as forgetting to change an address on your phone bill can be the difference between acceptance and rejection. Make sure you close down any unused credit cards, it looks bad having so many on your record and you’ll also reduce the chances of falling victim to fraud.

Credit Report, check it regularly

You should be checking your credit rating at least once a year, and definitely before making an application. This will help you figure out exactly where you are and allow you to put plans in place to reach financial enlightenment. Unfortunately, mistakes are fairly common on credit ratings, so make sure you check them closely and contact your credit agency with any queries.  

No more applications

Whether you’re successful or not, every single application for credit is recorded on your file. Making a number of applications in a short period of time is never a good idea, and will lead lenders to believe you’re in some kind of financial difficulty. The wisest thing to do is chill for a while and start to re-build your credit rating.

Turn over a new financial leaf

Long term, there a number of things you can do to improve your rating. You need to be able to show lenders you can borrow responsibly, so the most important thing to do is make any repayments on time.

You may also want to look into credit-builder credit cards – these only allow you to borrow a small amount of money but can improve your credit rating a lot.

Your credit rating is important, but it shouldn’t stop you getting a good night’s sleep. If it does, let me help – swing by my Credit Reports section for tips, ideas and guidance. My words are like lullabies of financial wisdom. Sleep well, my friend.

Peace and loans,

The G