How to make sure of your loan

Explain your special circumstances

If you have a bad credit record, or you are currently in financial difficulty, it could make sense to seek advice rather than borrow more. If you have missed repayments in the past, they will remain on your credit record for at least 36 months. Court judgments, IVAs and bankruptcies stay on record for at least six years.

If special circumstances explain your problems - for example, you suffered a serious illness - you can add a note to your credit report. Lenders may take this into account.

Steer clear of any organisation that claims it can repair your credit record - this is not possible unless a serious mistake has been made, in which case you can correct it yourself. Certainly never pay any organisation for so-called "credit repair", or any type of debt advice or rescheduling of debts.

If you are having problems gaining credit, the first step should be to review your spending, and if you are having problems with debt, seek advice from a debt counselling service .

One very simple way to improve your credit rating is to register on the electoral roll if you haven't already done so. Credit reference agency Experian explains that lenders use the electoral roll as a precaution against fraud, to help check that you are who you say who you are and live where you claim to live. If you are registered at a different address to the one on your application form, or dont appear at all, they may ask for proof of residence or even turn you down.

Experian says: "Fortunately, its easy to put matters right. Contact your local authority, or download a voter-registration form at www.aboutmyvote.co.uk."

Problem debts? Check out Moneyextra's Debt Advice Centre

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Annie Shaw
11 March 2008 © Moneyextra.com

PERSONAL LOANS - SECURED LOANS - DEBT CONSOLIDATION - DEBT ADVICE - HELP WITH PROBLEM DEBTS - CREDIT CHECK

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.