9 ways to improve your credit rating
If you have a poor credit history, it’s important to remember that entries on your credit report only remain for six years. This means it is possible to repair your bad credit rating and increase your chance of being accepted for a car lease in the future.
But in the meantime, if you have a car lease application rejected due to poor credit, contact Eureka to see how we can help. We specialise in helping people with poor credit to secure a bespoke car leasing deal.
Here are nine ways to improve your credit rating to make yourself more attractive to lenders in the future:
1. Check your credit report regularly
Check your credit report annually to make sure all your details are up to date and correct. Update your address and make sure you dispute any inaccurate or unfair entries. If you do spot any errors on your file, contact the credit reference agency or lender in question to have this investigated. Mistakes on your credit file can result in poor credit, so be sure to rectify these promptly.
2. Join the electoral roll
Make sure you are on the electoral roll. This makes it easier for lenders to confirm your identity and allows you to prove who you are. If your name is not on the electoral roll, it may be harder for you to secure car leasing deals.
“Entries in your credit file remain for six years, so check your credit report regularly for inaccuracies that could affect your rating.”
3. Space out your credit applications
Make sure you only apply for credit you really need and be sure to stagger credit applications out over time. Too many applications in a small window can indicate a problem, such as rising debt levels, and thus lead to a poor credit rating. Car leasing companies may assume you will struggle to keep up with monthly car lease rentals if you have applied for a lot of credit within a brief period of time.
4. Keep older credit accounts open
Maintain and use older credit accounts. Many companies advise you to close old credit accounts; however, older accounts give history and background to your report and show creditors that you can maintain long-term financial relationships. If you only have new account or agreements open in your record, this shows a lack of credit history and lenders may reject your credit application.
5. Remove any irrelevant financial relationships
You can ask a credit reference agency to remove any financial associations that are irrelevant, such as joint accounts or credit cards with an ex-partner. If a financial associate has a bad credit rating, this can affect your ability to secure a car lease.
"Keep your accounts up to date and meet rentals on time to improve your credit rating.”
6. Build up a stable address or employment history
Staying at the same address or with the same employer for more than three years will improve your credit rating and cause lenders to view you as stable and reliable.
7. Meet rentals on time
Keeping up to date with rentals shows car leasing companies that you are reliable and can manage your debt levels effectively. If you miss a rental, this will remain on your credit file for six years and will negatively influence your ability to secure a car lease in the future.
8. Keep your debt levels low
Lenders may be nervous about offering you further credit or a car lease if you already have high levels of existing debt. They may feel that you will struggle to meet repayments if you are already at your debt limit.
9. Keep your debt to income ratio (DTI) low
Lenders may be nervous to offer you a further loan if you have a high debt to income ratio. A high ratio may indicate you would struggle to keep up with rentals if a large part of your income is being used to pay off debt.
If you have bad credit and need to lease a car, contact Eureka to see which models you qualify for.