So, youve established the reasons for your poor credit rating. Now how can you go about fixing the problem?

Correcting Any Mistakes

If you disagree with the facts that the credit reference agency has on your file, you can dispute them. If the information is inaccurate, your record can be amended. The agency cant change things just because you arent happy about it.

Re-applying

Be wary of making too many applications if youve been recently turned down for credit every refusal will show on your record and count as another black mark against you. A better approach is to re-assess your finances, make a plan to tackle your debts, and apply again in a few months time.

Credit Repair Companies

There are companies who claim to be able to remove information from your credit file. Other than correcting inaccurate information, which you can do yourself, this not possible.

Debt Solutions

There are plenty of organisations to help you get a handle on your finances and manage debts. If the problem is out of hand, borrowing more money is not likely to be the best solution. You need to take advice from an independent, trustworthy source, such as a Citizens Advice Bureau or the National Debtline (www.nationaldebtline.co.uk). (The Debtline has separate pages for England & Wales and Scotland, as the law differs between the countries.) They provide a helpline, as well as fact sheets on how to deal with debt problems.

Often the first solution to managing your debt is to make a budget, listing all your debts and debtors. You should prioritise, and aim to pay off either the most important debts, like rent or bills, or the ones with the highest interest rates, such as credit cards with high APRs. If there are debts that you cant afford to pay right now, you should contact your creditors and explain the situation. If you offer to make small, regular payments over a period of time they might be willing to be more flexible.

If you have a number of debts on which the interest is high, it might be a good idea to consolidate these. Arrange an appointment with your bank manager and discuss converting credit cards and overdrafts into a loan. You may get a lower interest rate, and it will simplify your monthly repayments while reducing the overall amount you owe with every instalment.