How to Improve Your Credit Rating
Availability of credit can vary massively depending on the current financial climate, but when you need to borrow money, you’ll want to know that your credit score will be sufficient to let you. There are many things that can affect your credit score in a positive or negative way and we run through some of the key points to watch out for.
Your credit rating comes into play whenever you try to borrow money, whether it is for a mortgage, overdraft, loan or a credit card it is always good to think about how you can improve your credit rating to make sure you can get access to money when you really need it.
Whenever you take out a loan companies will score you using a variety of different methods to determine how likely you are to repay the money. The better your score the more likely they are to want to lend you money and may even give you a better rate. Read on to see our Online Shopping Guide tips to keeping your credit history under control!
Things to do to improve your credit rating:
- Sign up to the electoral roll: If you don’t make sure you are on the official governement electoral register then your chances of ever scoring credit is approaching zero. You are obliged to register anyway so make sure you do!
- Correct errors: Lenders should add a notice of correction to your file if you spot anything that is genuinly incorrect recorded against you.
- Check registered addresses on your file: Find out your credit rating and check that all the accounts have up to date correct addresses. Even basic errors can lead to problems when processing applications.
- Remove links to ex-partners: It is possible that an ex-partners bad credit rating can affect your own, if this is the case then contact credit agencies and notify them that you are nolonger associated.
- Cancel your old unused cards: Having access to credit already may harm your chances of getting access to more. This is undesirable especially when looking to replace existing cards with better rates.
- Rebuild your credit rating: You can begin to rebuild a poor credit rating by demonstrating you are a borrower who can be trusted. This can take some time so it is worth starting before you really need that credit. Take out an expensive credit card but use for small purchases only, making sure you pay of the balance in full each month. Over time this will help to repair a poor credit history enabling you to get better rates for when you really need it.
Things to Avoid if you want Keep your Credit Rating High:
- Always keep up to date with repayments: Missing a repayment will always look bad on your record. If possible pay off the balance of credit cards in full, or at least pay over and above the minimum payment.
- Avoid making multiple applications all at once: Applying for credit, whether for a mobile phone, or credit card, will leave a note on your credit file. If multiple applications for many products show up this can have an impact on future references.
- Avoid linked products: If one partner in a relationship has bad credit it will help if you keep things separate to avoid one partner damaging the other’s credit rating. This will apply to joint products such as bank accounts.
- Don’t reapply after being rejected: Credit rejections get recorded on your file and the more of these that get flagged up the more likely you are to be rejected again from future applications. So if you do find that you are rejected