How to Improve Your Credit Score

When you are wanting to do anything with your finance, whether it be to get a mortgage, a loan or even a credit card you will need a good credit score. Yes, don’t get us wrong, there are plenty of lenders and brokers, including us who offer bad credit loans. But, a lot of companies in the industry won’t want to associate with you if you don’t have good credit. Hence why you should improve your credit score.

Having a good credit score isn’t just something good to look at. It is something which will open more doors for you and potentially lead you to lower interest rates. So, it isn’t only good for business, but also for saving you money. Here are some tips on how to improve your credit score:

1. Look at your report & fix mistakes

Your credit score is based on the information from your credit report. If this information isn’t accurate then your credit score won’t be either. In this case, you should contact the company which is giving you false information as soon as possible. As this could mean your score is lower than it should be. Usually, we would suggest that you check your credit report annually, this is so you are able to spot and change any mistakes that it holds.

2. Keep your credit utilisation low

Keeping your credit card utilisation low, preferably under 30% of your limit, shows lenders that you can manage your credit sensibly. This will help you massively as it increases your chances of being approved as well as gives you a chance of getting lower interest rates.

3. Get on the electoral roll

One way to improve your credit score is to get on the electoral roll (register to vote). It can help to improve the way lenders view you. This way credit reference agencies are able to verify who you are, which can make you appear more stable to lenders.

4. Avoid making multiple credit applications in a short space of time

Every time you make an application for credit, a ‘hard search’ is carried out on your account and a mark is left on your credit report. You shouldn’t do this multiple times in a short period as it can negatively affect your credit score. One of the bonus’ of applying for a loan with us is that you only have to do one application. This is sent to multiple lenders who will then decide if they want to lend to you, so you have less of a chance of being rejected for starters but also less of a chance of your credit score is negatively affected.

5. Prove you repay your bills

Utility bills – such as your mobile phone contract or your gas bill – count as a form of credit. They’re a great way to show lenders you can pay your bills back reliably. This will boost your credit score if you pay back them in full and on time. But, you need to be aware that they could also negatively impact your score if you aren’t consistent and good with the repayments.

6. Check for fraudulent activity

Similarly to one of the previous points, if something on your credit report is incorrect or doesn’t apply to you, i.e. if someone applied for credit in your name without your knowledge, contact the credit reference agency immediately to have your file updated. It could be a sign of fraud, which is the last thing you want.

County Court Judgements (CCJs)

A CCJ is issued by the law and can last on your credit report for 6 years. It will have a negative impact on your credit score. As well as this it is likely that not many lenders will want to lend to you. This is due to the seriousness of a CCJ. Although, If you’re having problems keeping up with payments, visit The Money Advice Service.