Your credit score not only determines whether or not you will be able to get credit, it can also have an impact on the interest rates that you will be charged. If you haven’t checked your own credit score, then it might be a good idea to do so, because there are many things that you could be doing inadvertently that would adversely affect it. If you want to want to improve your credit score, there are some simple steps that you can take. Here are ten ways that can you make your credit rating better.
1. Find out what is already recorded against your name
It really is worth the few pounds that it will cost you to check out your credit score. The credit referencing agencies do make mistakes and lenders do not always pass on the correct information to them. If you register online with a credit referencing agency, you will see what is recorded against your name and you then get any errors corrected.
2. Get on the electoral roll
Even if you have no intention of voting at the next election, it is still a good idea to register on the electoral roll. Not doing so will have a detrimental effect on your credit rating and some lenders won’t lend to you if they can’t find all your details.
3. Close old credit card accounts
If you are one of those people who regularly transfer credit card balances in order to rake advantage of introductory offers, don’t forget to close of the old accounts. If you don’t, then you could have thousands of pounds of unused credit against your name and this could reduce your chances of getting further credit.
4. Always make your mortgage payments
If money does get tight, always pay the mortgage payments first and then work out what else you can pay. A missed mortgage payment puts a huge dent in your credit rating, so if you are having difficulties, speak to your mortgage lender and see if you can arrange reduced payments, or a repayment holiday.
5. Be careful about making loan applications
If you are looking for a loan, be careful about making too many enquiries with too many potential lenders. If you apply for a loan, or even if you just enquire about a loan, the lender may make a credit check on you, which reduces your credit score.
6. Remember to remove your ex from all your finances
A divorce doesn’t stop you being liable for any joint accounts that are left open, so make sure that all joint accounts and finance agreements are closed, or transferred to a single name. This is a common mistake that people make and they find out later that their own credit score has been damaged by something that their ex-partner has done.
7. Always pay your bills on time when you can
Many of your regular bills are classed as credit and late payment of these bills could affect your credit score. Utilities, such as electricity and gas, are particularly important, because the utility companies are notoriously quick at passing unpaid bills over to debt collection agencies and that will have an impact on your credit rating.
8. Create a credit history for yourself
There have been cases of very wealthy people being refused credit, simply because they have never borrowed money before. Lenders view properly used credit as a good sign, so even if you don’t need to, do use your credit cards and then repay the balance at the end of each month, so that you have some kind of credit history against your name
9. Reduce your utilization ratio
30% of your total credit score is based on how much you owe in total, so one of the simplest ways to get a better credit ratio is to pay off some of your debt. If you know that will be applying for a loan or other form of credit, it might be worth getting even the smaller debts, like store cards, paid up to date.
10. Check your credit report carefully
Some lenders can be very slow at informing the credit agencies when debt has been repaid and sometimes errors are made. Check your credit report very carefully to make sure that it is accurate. You should also be looking out for credit fraud too, which can happen if someone has used your details to obtain credit for themselves.