There are plenty of reasons to try to improve your credit score, your credit score will have an impact on how you will get a mortgage or a credit card or even a loan. I have listed 19 ways to try to help you improve your credit score.
Make Regular Payments On Time
If you have credit cards, loans, bills or a mortgage to pay make sure you pay them on time in full every month as it will show lenders that you are a reliable borrower and are capable of paying back what you owe.
Prove Where You Live
Make sure you register yourself on the electoral roll at your current address, even if your living in a shared accommodation or living at home with your family or friends.
Never Miss Or Be Late On Any Credit Repayments
Try not to miss any payments that you owe to a company even if you are struggling try to manage your money a bit better so you can afford to make the payments you owe. If you default or miss a payment it will have a major impact on your credit score, defaults in the previous 12 months will potentially hurt you the most. If you can pay everything by direct debit that way you wont miss a payment. If you are in difficult position and cant make a payment contact the lender and explain your situation they might be able to help you.
Cancel Unused Credit And Store Cards
If you have any unused store cards or credit cards that you don’t use or even need its best to cancel them, as having too much available credit can lower your credit score. However, to complicate things even further long standing accounts with good credit history can help your credit score so sometimes they are best left open.
Build Your Credit History
If you don’t have any credit history or a little credit history its difficult for lenders to assess you and your credit score may lower as a result of this. There are plenty of ways to build your credit score as getting a builder card to boost your credit score or avoid any expensive credit repaid companies that claim to help boost your credit score or repair your credit score.
Get An Instant Score Boost
Many credit companies are now giving a free instant credit boost to help improve your credit score, they will take into consideration your financial responsibilities like paying your Netflix, Spotify, Council tax and even paying into your savings account each month. Just contact your credit score company and ask how they can help you do this.
De-Link From Your Ex Partner
If you and your ex partner have joint accounts and bills its best to contact the companies and tell them you have split up and you no longer share finances, also write to your credit reference agencies and ask them for a notice of disassociation. Once you have done this it will stop your ex partner finances messing up your credit history. If you still have a joint account open with your ex partner some credit agencies wont do this till you either close the account or once the account is transferred to an individual account.
Check Addresses On Old Accounts
Having a wrong address linked to you could also put some impact on your credit file, go through every account you have making sure you have a current address listed. If you apply for a credit card or even a mortgage and you have an old address linked to you, you might be declined for this reason.
Keep Your Credit Utilisation Low
Your credit utilisation is the percentage you use of your credit limit. For example, if you have a limit of £4,000 and you have used £2,000 of that, your credit utilisation is 50%.
Usually a lower percentage will be seen positively by lenders, and will increase your credit score as a result. If possible try to keep your credit utilisation below 30%.
Paying Your Rent On Time
If you pay your rent on time every month you could always add this to your credit file, there is plenty of schemes that private renters and social housing tenants can use to boost their credit ratings. Some of these schemes will have a rule that you will need to be signed up to them for at least six weeks for your rent payments to start to appear on your credit file.
Check For Any Errors On Your Credit Report
If there is a mistake on your credit file such as a previous address, spelling mistake or even a credit limit is wrong its best to contact your credit provider to make sure this is
corrected as if there is a wrong mistake it might cause an impact on your score.
Don’t Withdraw Cash On Credit Cards
If you withdraw cash from a credit card this is very expensive to do as interest will be much higher and you will be charged even if you repay in full each month. Many lenders may see this a poor money management and it may even impact your credit score.
Avoid Moving Home A Lot
If you can try not to move home a lot as lenders like to see stability in your circumstances, the longer you live in one property might be able to help your credit score.
Monitor Your Credit File For Fraudulent Activity
Keeping an eye on your credit file to see any unrecognised application can mean a fraudsters got hold of your details and tried to make an application in your name. If you see an application that you don’t recognise contact the company that approved it and also contact your credit file fraud team specialist.
Time Your Applications Right
Problems such as county court judgements and bankruptcy stay on your file for six years, and data about applications for one year. So if you’re near a time when old issues will lapse, holding off until they go can help you.
Keep Old Accounts Open And Show Long Credit History
Using multiple credit accounts and having them open for longer may give you a good few points on your credit score, most credit score companies reward you for having long standing accounts that you have had for many years and use a small portion of the credit you have.
Don’t Spend Your Applications Too Often
Every time you apply for a credit card, loan or even a mobile contract it adds more to your credit file for a year, if you do too many in a short space of time can trigger you to have less points and be rejected by lenders. Each application you do will leave a hard search and will show lenders that you are desperate for some kind of credit.
Avoid Defaulted Accounts
Defaulted accounts usually mean your relationship with your lender has broken down, usually because you have missed several payments. Defaulted accounts can have a significant impact on your credit score so try to keep up with your payments.
Consider Getting A Builder Card
If you already have a low credit rating and want to improve your score you can try to apply for a builder card, they typically have low credit limits and high interest rates. When you first receive your builder card you may see a drop in your credit score, but if you use it well it can have build your credit limit over time.