7 simple ways to improve your credit score now!
If you’ve sought debt advice recently you may have been alerted to your poor ‘credit rating’ – this rating is based on your individual ‘credit score’, a number allocated to you by a credit reference agency that gives an indication of how reliable and able you are in terms of debt repayment.
The higher the score, the better prospect you are for a company who is lending you money or allowing you to purchase items on credit.
Essentially, a low credit score indicates that you may be a risk in terms of repaying money, so some companies will decline to offer you credit or a loan – and those that do will often inflate interest rates and charges to reflect this higher risk.
It’s not all bad news!
You might think that the only way to boost that score is to make repayments on your debts and hope for the best – but this is not the case! Here are 7 simple things you can do that can have significantly positive effects on your credit score:
- Stop applying
You might have become aware of your poor credit score after being declined credit by a lender. In some instances, this causes people to look elsewhere, potentially applying for credit numerous times. Every time you apply your credit score can be impacted. If you stop applying now and try to address the issue you’ll stand a better chance than if subsequent lenders see lots of applications for credit in the last few days or weeks.
- Look for mistakes
Your credit history is not always accurate, sometimes errors can lead to your credit score looking lower than it should – you can apply for your credit report easily, do so and have a look through all the information on there. Notice something that looks outstanding but you know is paid? Contact the credit reference agency and explain that you believe there is an error. They have 28 days to either remove that info or come back to you with a reason why they believe it to be true. In the meantime, the error is marked as being under investigation and shouldn’t impact any application for credit.
- Anything untoward?
Fraudsters can be extremely clever when it comes to identity theft and the application for credit – it can sometimes be done with absolutely zero evidence alerting you to the issue. If you look at your credit report and see something that you have no recollection of – make further enquiries. You might have been the victim of fraud and your credit score could be paying the price.
- Electoral Register
Lenders like to know that you have a permanent place of residence – but it’s easy to slip up and forget to update this if you’ve recently moved to a new house. Credit reference agencies look at this electoral register to decide if you have a current address – the good news is you can quickly register online – and this can have a big impact on your credit score.
- Unused cards?
Your credit score depends somewhat on the amount of credit that you access to now. You might not be using that credit card in the drawer at home but a lender doesn’t know if you plan a spending spree with it tomorrow. Cancelling any unused cards reduces your amount of potential debt – and inspires confidence in lenders.
- Any association?
In the past poor credit scores were allocated to addresses – now they’re attributed to individuals. If your partner has a poor credit rating any financial association you have with them could reflect poorly on you. Got a joint account you don’t use? Close it and your credit score can be impacted positively.
- Unnecessary debt hanging around?
Store cards have previously been a source of never-ending debt, your payment just covered the interest and the actual debt was never reduced. Fortunately, this practice no longer occurs – but small minimum payments can still be a problem. Look at the amount you’re paying and how long it will take you to pay off the full amount – sometimes just upping the repayment by a small amount can significantly shorten the time it takes to clear this debt – and when it’s clear, your credit score will reflect it.
Where to begin?
Each of these factors can individually make a big difference to your credit score – and if more than one has caused a problem then getting them dealt with can be an extremely positive step. You have a legal right to see your credit score – contacting any of the large credit referencing agencies and obtaining is the best first step in making a change.
2 May 2017
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