How to build up your credit after debt

Reinvestment_1If you’ve been struggling to pay off restrictive debts for any period of time, then borrowing again will probably be the last thing on your mind. That feeling of being debt-free is a relaxing and warm one, but unfortunately many people struggle to pay for some of life’s necessities in cash. This blog features useful life hacks on how to do it properly. For example, after a protracted period of paying back debt you might feel confident enough to take on a mortgage, or perhaps pay for a car or holiday – and the likelihood is that you may need to borrow.

If you’ve been in debt for some time your credit rating might not be at its strongest, particularly if you’re near your maximum credit limit. So what can you do to boost your rating and put yourself in position to change your financial status?

Check credit report

The first stage is to look at your credit file and assess the overall situation, noting down mistakes or oversights from before, and steps you will undertake in the future. Late payments, going over the limit, borrowing from multiple sources and applying to borrow from multiple sources, are all negatives. From the viewpoint of the lending companies, these actions all indicate risk and uncertainty.

A great tip we found in a local council tax debt guide is that a credit check with companies such as Equifax and Experian can be free providing you cancel within a month – after that it will be £10 a month.

Six years

Both positive and negative items on your credit file will linger for up to six years before disappearing, so if you have any negative remarks they may linger until the next decade. Therefore, don’t expect miracles the moment your debts are paid off, but equally be heartened that any positive effects from years ago will remain.


It’s worth delving into your credit file in some detail, because mistakes and negative associations can arise. Past/present partners and relatives can impinge on your rating in strange ways.

 Start small

You’ve seen how difficult managing debt can be, so it’s probably clear that you shouldn’t just dive in and borrow the maximum you can straight away once cleared. If you want to build your rating, start slowly by applying for small amounts of credit from companies such as Avant Credit, Easy Loans Company and others.

Credit cards

If you’ve been successful with your application, make sure to stay within your means, build slowly and diligently, and use your credit cards or loans carefully. Don’t be tempted to go mad and max them out, as this could be the root of why you fell into trouble in the first place. Also, don’t fall into the trap of applying for multiple credit cards just for reward points or perks such as 0% balance transfer rates, for the same reason.

Ultimately the way to build up a credit rating, and indeed probably have a happier and less stressful life, is to keep things simple, be diligent in your spending, and establish a good financial habit. Don’t pursue luxuries until you are confident you can pay for them and you’ll soon be back on track making that wishlist a reality.

This post is in association with Avant

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