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Smart Ways To Improve Your Credit Score and Rating

Money Matters Editor By Money Matters Editor 7 Min Read

Having a good credit score does you more good than you can ever imagine. A bad credit score can cause all sorts of problems when it comes to applying for financial products.

Before a bank or credit card company decide to lend you money, they will look at your credit score. The higher your credit score, the better your chances and the lower the interest you will pay.

Everyone is entitled to see their credit score – in fact, you are strongly encouraged to do so if you haven’t already.

Get a copy of your credit score and ensure the information is correct; if anything is wrong, you will have the chance to put it right.

Best ways to improve your credit score

It’s strange but true. If you have never used any credit facility before, you are automatically given a low score because your creditworthiness has not been proven.

So to prove your credit worthiness, you will have to apply for a credit card, only spend a small amount on it each month, and pay it off regularly and your score will be improved.

Below are ways through which you can improve your credit score:

#1]. Ensure you’re on UK electoral roll

If you are living in the UK, being on electoral roll is an important element of the credit scoring process, and that’s why not being registered is likely to result in an application being refused.

Therefore, make sure you contact your local council to ensure that you are on the electoral roll, and that your details are up to date.

 

Best move to make
If you have recently moved house, you can request to update your details on electoral register. You should either contact your local Electoral Register or visit their website.

#2]. Space out applications, do one thing at a time

If a lot of credit searches are done in a short space of time, it could have a negative impact on your credit score. Every time you apply for financial products like loan, credit card, insurance or even a contract or monthly payment mobile phone, a credit will be conducted – so try not to do it all at once.

Best move to make
Always try to do one thing at a time for your own good sake. Do not apply for lots of financial products like credit card, loans, mortgage and others at once. Lenders will wonder why, and you will get your credit score reduced.

#3]. Never miss a payment

Missing payments once or twice can also affect your credit scores for years. Always make sure that you are doing your best to make minimum payments as at when due, and if you are struggling with money, discuss your situation with your lender.

In fact, your lender might decide to alter your payment schedule so that you will be able to meet up. Though an altered payment schedule isn’t really great, it is better than ending up with a County Court Judgement (CCJ).

Best move to make
If you are getting behind your payment schedule, the best thing to do is to contact your creditors and discuss your situations. Some creditors are considerate and you might be lucky to get payment rescheduled or even reduced. Therefore it is better to get in touch rather than panicking.

#4]. Manage your bank accounts

There are some essential facts you should know about your credit cards finance. They will help you understand that having lots of credit cards to your name doesn’t do you any good at times even if they are paid off.

Another thing you should know is that the more money you have access to, the more likely you will spend and end up in loads of debts. It’s advisable to only get one or two accounts, as well as credit cards to your name as this, will help you to at least be able to manage your finance.

Best move to make
Try to cancel all unused cards and bank accounts so there wouldn’t be so many things in your name. Make sure you are maintaining the remaining ones as well.

#5]. Protect yourself against fraud

Quite lots of people have lost huge amount of money to fraud and identity theft. This is why protecting yourself from those guys out there that are willing to steal from you is very important.

This is one of the best things to do if you are really interested in improving your credit score. Be smarter than them, don’t be a victim!

Also, if you have been involved with someone who was bad with money, you should let the credit agencies know. You can write them and ask for a “Notice of Disassociation” so that you will not be affected by their bad reputation.

 

Best move to make
Modern technology means that it’s much easier for people to steal your identity and use it to purchase or order stuff without your knowledge.

Therefore, the best thing to do is to keep your bank and credit card details safe. Don’t use your card anyhow and watch out for fraudulent online e-commerce shops.

 

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