Whether you like it or not, your credit score can change your life. If it is considered bad, it could stop you from buying your dream home and even prevent you from getting a new phone contract. As unfair as it may seem, credit scores take your past financial behaviours into account. So if you got into debt ten years ago, it could still be prevent lenders from giving you money today. Many people may not even realise they have a bad credit score until they get denied for a loan or contract. But thankfully you don’t have to stick with the score you have got.
Use these simple steps to push your score in a more positive direction and get it looking healthier in no time.
Check Your Credit Score
Most people don’t realise they can check their credit scores. Which can leave them feeling confused and embarrassed when their applications get refused. Lenders will use your credit report to see how much you can afford and if you can keep on top of repayments if you borrow from them. So before you even think about improving your score, you need to know exactly what it is. Checking your score can also help you find faults and mistakes which could be affecting your score. For instance, your report may state that you are living at a different address or still married to your ex-partner. The smallest of errors can cause massive problems for you. So check your report and make sure it is updated with information that reflects your current circumstances.
Many sites will allow you to check your credit score for free and it can be found almost instantly. Get into the habit of checking your credit score regularly to make sure there are no more errors. This will also help you protect yourself from fraudulent activity on your account that you did not authorise.
Pay Your Bills On Time
Paying your bills in full and consistently on time can go a long way when boosting your score. Even making sure your smaller bills are on time can make a substantial difference. Banks and lenders will often have strict deadlines and payment plans that you need to adhere to. These are most commonly monthly payments over a set period. If your report says that you frequently miss payments, ignore deadlines and have incurred fines, this will not make a good impression. They will be less inclined to lend to you which could make your life increasingly difficult. Often your report will keep a note of this behaviour in your finances for three years. Which is a long time if you’re desperate for a new phone or want to apply for a mortgage. Find out exactly when your bills need to be paid and how much. Create alerts on your phone or write down on a post-it note to remind you a few days before your bill is due. You could also set up a direct debit which will send the money automatically. This will be a fantastic start to getting on the right track and making a better impression to lenders.
Don’t Apply For Multiple Credit Accounts At Once
Whether you realise it or not, every time you request a credit check that information is stored onto your report. When you approach a lender and they check your report, it creates a footprint. So whether you get accepted or not, this check is documented. So if you then visit another lender and have a credit check carried out, they will be able to see the previous check that has been done on your report. This may make them question why you did not receive credit previously and could prevent you from getting what you want. After a refusal at one lender, it can be tempting to visit another and hope you get lucky. But these multiple checks can hurt your credit score so keep them to a minimum.
Some companies offer contract phones with no credit check, if you’re desperate for a new phone. Or alternatively, you can apply for a credit builder cards that cater to people with bad or no credit history.
Make Sure You Are On The Electoral Roll
This may seem off topic, but you are unlikely to get any credit unless you are on it. So make sure you are registered to vote at your current address. This is what lenders, insurance companies and banks will use to see if you are being truthful about where you live. Some people may give the wrong address in the hope it will improve their scores. So your name and address on the electoral roll adds some legitimacy to your application for a loan or credit. You will need your national insurance number to hand to register. But the process is quick and easy and can be done online. It will increase your chances of being accepted and improve your credit score making it an essential step.
If you aren’t currently on the electoral roll, the lenders may need some other forms of identification instead. So always have this proof and documentation with you before approaching a lender.
Don’t Worry About It Too Much
If you get your finances in order, pay your bills on time and use your current credit responsibly, there is no need to worry. More people than you think have bad credit scores and it is nothing to be ashamed of. Paying off accounts you no longer need is another way of boosting your rating. Over time your smart spending habits will become apparent in your report. Which will come in handy when you need to need credit in the future.
Using these simple steps will help to get you in a position where you might have a loan agreed. It will also save you the embarrassment of refusals in the future. The key to a good credit score is consistency so keep this in mind. Start smart habits and regularly check your bank statements to highlight signs on overspending. It will take time, but the more you nurture your credit, the better it will become.
* In Association With Brand *