7 Tips To Improve Your Credit Score

When applying for credit, one of the things lenders look at is your credit score to decide whether they will lend to you. The higher your credit score, the better your chances of obtaining not only a loan but also a better rate. And the opposite also happens.

Whilst this is not the only thing they look at, they also look at things such as affordability, it’s so important for everyone to take time to understand what you can do to increase your score. We know it can be difficult, so we have some tips to help:

1. Keep up to date with all regular payments

Late payments can negatively affect your credit report. It’s therefore important to make sure that all your regular payments are on time. This shows lenders that you’re capable of handling credit responsibly.

2. Register for the Electoral Register

Lenders will check if you are on the electoral register to verify your current and previous addresses. Register by contacting your local council, you should also always re-register if you move. How to register to vote can be found here.

3. Pay any outstanding amounts you owe

If you have any overdue credit you should look to settle it. Your credit report will then show that they’ve been settled. Although they continue to appear on your report for up to six years, lenders may see these payments in your favour when considering if they should lend to you.

4. Sign up for your credit report

Most lenders use information held by credit reference agencies when deciding to lend to you, therefore it is a good idea to know what they are looking at. The largest agencies in the UK are Experian, Equifax and TransUnion. It’s also a good idea to check all three if possible as the information they hold might be different.

5. Dispute any incorrect data

All three agencies allow you to dispute any incorrect data you may find in your report. You can find out how to do that here.

6. Add a statement to your credit report if your situation had improved

You can add a short statement that explains why your credit report is less that pristine, this may help lenders understand that the problem was temporary. This should be sent to the main credit reference agencies, some of them even have suggested wording online that can be adapted to your personal circumstances.

7. Wait at least 6 months before trying to apply again

When you apply for credit and a lender checks your file a record is left on your credit report. More than a couple of these unsuccessful applications in a short space of time can lower your credit rating and make lenders extra cautious about offering you credit.

It’s up to you to get your credit score right and on an upward trend. Is it tough to do it? Of course it is! But in the long term it pays off to work towards this goal: you will get better rates, better deals and better chances to take control of your personal finances.

Keep an eye on our next blog posts, as we’ll be providing other tips that can help you stay ahead of the curve!