MONEY TRICKY TRICK : THE SECRETS OF OBTAINING A FIRST CLASS CREDIT RATING

Today it is virtually impossible to survive and prosper financially without a good credit rating. There have been times in the past when I have taken business risks that turned out very badly and I have lost a lot of money. Even worse than losing the money itself is the damage that serious business failure can do to your credit rating.

After having had over 20 major credit cards, bank loans and overdraft facilities, with an ability to raise in excess of £100,000 in credit, I was left with massive debts and a credit rating so poor that I couldn't even open an ordinary bank account!

The one sure thing I learned about borrowing vast quantities of money, at high interest rates, to finance business deals and ventures, is that access to credit is virtually essential for any real wealth creation.

It was unfortunate for me that I had to learn the hard way about the importance of maintaining an excellent credit rating. After having access to easy credit, I lost hundreds of thousands of pounds on property deals and other business ventures. Only after this experience did I realise how fortunate I had been to have been in the position to gain the kind of credit I was using in the first place.

I have now re-established my credit rating to a first-class level, and I intend never to create a situation again where my credit rating is put in jeopardy.

The method detailed below is the one I used to rebuild my credit rating back to a level where I will never need to worry about access to money for any purpose.

When you have no money at all and your assets are all frozen because of debt, and no bank or other lending institution will lend you a penny, you may think that creating a credit rating where you can eventually borrow almost unlimited sums would be virtually impossible.

In fact, with absolutely no cash at all, it is virtually impossible. Some amount of cash is essential. To get this plan up and operational within the couple of months that it takes to become productive an ideal sum of money would be in the region of £1,000.

After enjoying a fairly wealthy lifestyle and being used to the finer things in life, I ended up broke and almost bankrupt. I avoided bankruptcy by the skin of my teeth.

To get some money to start my credit building plan I took every one of my personal possessions which I thought I could sell. I attended car boot sales, at which I managed to raise just over £350. I put together another £300 by selling furniture and other personal effects through adverts in the local paper.

Keeping £150 as an emergency fund I took £500 to the nearest bank and opened the highest interest savings account that I could get. After a week I applied for a personal loan from the same bank and offered my £500 deposit as security. Because the sum I wished to borrow was already held by the bank, they were only too glad to loan me the £500.

So I then had £500 cash in hand and £500 in the bank. Naturally I had to make monthly repayments to the loan. These were kept to a minimum by taking the loan out for the maximum period allowed, which was 2 years. This left me with repayments of less than £1 a day.

I then took the £500 I had borrowed to another bank and opened another high interest savings account with it. Following the same procedure I opened savings accounts at six banks and used the final £500 to cover the repayments.

After a couple of months repayments had been made to each loan I took the £150 emergency fund I had set aside and added it to the capital I still had. I used this to repay the last loan I had taken out. This allowed me access to the savings I had with that bank. Then, after each subsequent month I paid off each of the loans in turn.

Having done this it was easy to go to the first bank and apply for a loan of £500 secured on my home. They were happy to lend me this money because I had shown them that I could borrow and repay a previous loan. So, in spite of my terrible credit history, after having lost a great deal of money in business ventures which went wrong, I had rebuilt my credit rating to a first-class level within six months.

If you have no previous bad debts there is no reason why you could not establish this level of credit rating within two months.

And once you have established a credit rating with a few banks you can apply for their credit cards. Initially you may have to settle for a fairly low account limit, but this can be increased rapidly by using the credit cards to borrow money up to the limit of each card every month, and then repaying the full sum at the end of the month.

Within a few months you can request and normally will be granted an increase in credit limit. I used this method with store-cards also and now have a £5,000 limit on most credit and store cards I use.

One thing to always keep in mind : once you have established an excellent credit rating, don't lose it. I became too careless with borrowed money in the early days because I had easy access to credit. Now that I have rebuilt my credit rating to a top notch level I will never let it be ruined again.

Always be very careful when borrowing money to invest in wealth generating programmes. Do your research...don't just jump in at the deep end...I did, and lost out, big time!

Keep your credit rating healthy by always ensuring that you are able to make any repayments that are due, and make these repayments on time. Even if you have to borrow from one source to make a payment to another, this can be worth your while as the maintenance of your credit rating is one of the most important things you will need to take care of on your journey to financial prosperity.

NB : Most of the larger banks and building societies now automatically check your credit rating and, if you have been blacklisted for any reason, such as default or CCJs, then they won't even lend you the same amount as you have deposited with them. This is a recent development which limits the widespread use of the above plan. However, some of the smaller building societies and some banks will still lend to you, regardless of your credit history, provided that you have the right security.

The supplement included at the end of this guide has a listing of institutions which specialise in lending to people with a poor credit history. So, even without the need to have funds lodged with them, as suggested above, there are always alternative sources to the main banks and building societies.