A good credit score is important for anyone to have. A poor rating can have a dramatic impact if you are seeking any form of financial assistance, whether it’s a mortgage, credit card or loan, or even a mobile phone contract.
Here are our top tips on how to improve your rating:
Keep an eye on your credit report
Be sure to review it annually and report any mistakes to the relevant credit reference agencies so they can be corrected as soon as possible.
Make sure you’re on the electoral roll
If you’re not on the electoral roll it’s unlikely that you’ll get credit. It provides important proof of address and lenders are less likely to be suspicious of a fraudulent application.
Pay your bills on time
Don’t max out your credit cards. Instead, demonstrate to lenders that you are a responsible borrower who makes payments on time. If you miss payments, a note will stay on your credit report for a number of years.
Plan wisely
Don’t apply for multiple loans and credit cards at the same time. Every time you apply for credit a lender will look at your report and this leaves a ‘footprint’. If other lenders see many ‘footprints’ it may adversely affect your chances of securing credit.
Close old credit and store card accounts
If you have credit or store cards that you no longer use, ensure you close them down. This is because potential lenders will look at the total amount of credit you have available, not just how much debt you are in, when making a decision. They may be concerned that you may suddenly take advantage of all your available credit, thereby decreasing the chances of you being able to pay what you owe.
Your credit score helps a lender to determine what sort of borrower you are and how likely it is that you will be able to make repayments. Taking steps to ensure it is as good as it can be will pay dividends in the future if you are seeking financial help.