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How to show lenders you're reliable if you have bad credit

Having a bad credit score can make it hard to get loans or credit cards with low interest rates. However, it is not impossible to show lenders that you’re reliable, even if you have a poor credit history.

Here are the main things you can do.

Provide a guarantor

If you are struggling to get a loan due to a poor credit history, consider getting a guarantor.

A guarantor is someone, usually a close friend or family member with a good credit score, who agrees to repay the debt if you default.

This can increase your chances of approval, especially for larger loans or credit cards. You must be careful, however, not to strain the relationship.

Show a detailed financial plan

When applying for a loan, give lenders a detailed financial plan which shows how you intend to repay the debt.

This can include a budget, your plans to get a new source of income or a second job, and any other financial documents that show your ability to manage debt.

Add a Notice of Correction to your credit report

A Notice of Correction is a short note, under 200 words, that you can add to your credit report to explain something that might be negatively impacting your credit score.

It is a way to give context and clarify any errors or potentially misleading information on your credit file. This can help lenders understand your financial situation better and make more informed decisions about your applications.

Here is an example:

"I was unable to make my credit card payments on time due to a serious illness. I had to take time off work for treatment, which caused financial difficulties. I have since recovered, returned to work, and am now making regular payments to clear the outstanding balance. I would like to provide this context to lenders reviewing my credit file."

This example explains a missed payment due to serious circumstances, gives lenders some reassurance that the situation has been resolved, and asks that lenders consider this context when reviewing the credit report.

Keep in mind that a Notice of Correction does not improve your credit score. It’s only meant to give lenders a bit of context. For example, they might understand if you missed a payment because of job loss or illness.

Add more data to your credit report that shows you’re reliable

Lenders mostly care about your credit score, which is mostly based on your credit history. However, having data on your credit report that shows you pay other bills on time can matter, too.

There are two ways you can do this.

The first is to sign up to Experian Boost. Experian Boost is a free service offered by Exoperian that lets you add on-time payments for certain household bills to your credit report. This includes payments for things like Council tax, utility bills, and even Netflix or Amazon Prime subscriptions.

However, lenders don’t directly see this. Experian simply calculates a “boosted” version of your credit score and shows lenders both versions. While a useful and free service, not all lenders participate in the Boost program. We’re also not sure how much they care about the boosted score. Still, it can’t hurt.

The second thing to add to your credit report is your regular rent payments. There are many apps you can use for this, and one of them is Wollit. Wollit is a specialised credit-building app that, besides helping you improve credit history, can also report your rent to Experian, the largest UK credit reference agency.

This can add another line in your credit report that shows lenders that you’re reliable and pay your bills on time, helping you make the most of your rent.

Improve your credit history and score.

This is what lenders care most about. Here are some steps you can take:

  • Pay your bills on time. One of the most significant factors in determining your credit score is your payment history. Make sure to pay all your bills, including credit card payments, loans, and utility bills, on time. Late payments can significantly lower your credit score.
  • Keep credit utilisation low. This is the percentage of available credit you are using. Aim to keep this ratio below 25% to demonstrate responsible borrowing habits. So if you have a credit card limit of £500, try to not use more than £125 per month.
  • Hold off from making too many loan applications at once. This can also hurt your credit score. Only apply for credit when necessary, and space out your applications if you need to apply for multiple lines of credit. Experian recommends no more than two applications every six months.
  • Consider a credit-building card or loan. These loans are meant for people with poor credit and can help you build a positive credit history by making regular payments. However, they come with high interest rates (often above 40%), fees, and low credit limits (which can make it hard for you to keep credit utilisation low).
  • Download a specialised credit-building app like Wollit.

Building your credit history with a credit card requires you to first buy things on debt and then repay them as soon as possible. With Wollit, you only need to pay a fixed monthly subscription. Wollit then reports this subscription as a loan repayment to the credit reference agencies (Experian, Equifax, and TransUnion).

This directly builds your credit history and improves your credit score, while keeping you safe from high interest rates, maxed-out credit cards, or the risk of more debt. More importantly, it will show lenders that you’re reliable, which is what they care most about.

Wollit, no stress, no hassle - just a clear path to better credit

Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.


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Feel better about your credit score

Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.