5 Ways to Improve Your Credit Score

Your credit score is looked at each time you want to take out a loan or get credit on a purchase. Lenders use your credit score to decide whether they should lend you any money and how much to lend. A bad credit score could leave you struggling to get finance on big purchases.

Your credit score is important for any purchase from Mortgages to phone contracts. Defaulted payments could leave you unable to take out a mortgage. Take a look at these top tips to improve your credit score.

Get a credit card

Using a credit card can actually be beneficial to your credit score. If you make all of your payments on time then this shows you are a responsible borrower. You could use a credit card for small purchases to ensure you can make the payments on time. Just remember to be careful as missing payments could only make your credit score worse.

Check for errors

Sometimes there can be mistakes on your credit score which could be affecting your chances of getting finance. Websites such as Experian allow you to view your credit rating and check for any errors. If you spot any then you can raise the issue with the lender and hopefully get it corrected.

Join the electoral register

Being on the electoral register is an easy way to increase your chances of lending. Being on the electoral register allows lenders to see proof of your identity. This avoids potential fraud and lenders can have confidence that they are lending to the correct person. If you are not on the electoral register then you may need to prove your identity via another method such as a Passport or Driving License. To Sign up, just visit About My Vote or contact your local council.

Make all your payments on time

In the long-term, making all your payments on time is one of the best ways to improve your credit score. By doing this you are showing potential lenders that you are a sensible borrower who is able to pay on time. Paying utility bills and phone contracts on time are good ways to boost your credit score. If you need to, change the dates you pay these to ensure you have enough money at the time of the month they are due.

Don’t take out multiple credit at once

Lenders do not like it when they see you trying to take out a lot of credit at the same time. This shows you are in great need of finance and may make you look more of a risk. If you need to take out different forms of credit such as phone contracts and credit cards then do not do them at the same time. Waiting several months in-between will not make you look as desperate for finance and therefore less of a risk for lenders.