Both my husband and I have a good credit score. It’s much higher than the UK average which is something we pride ourselves with. Although let’s be honest it wasn’t always that way. We have taken steps to improve it.
We needed too as we were getting knocked back for finance and were worried it would be an issue when we were buying our new house four years ago. Even if you do get accepted for finance you tend to find you will be paying a higher rate of interest if your credit score is quite poor. It really is in your best interests to boost your credit score.
If you’re wondering how to increase your credit score read on. It’s something you can alter quite quickly if you follow these steps. So, don’t be disheartened if your score isn’t very high. You can soon turn that around and get better deals again.
Get a copy of your credit report
First things first you need to access your credit report. We like using ClearScore as it has lots of useful information on there. But you can also try companies like Experian or Equifax. You can check how accurate the report is and rectify any mistakes that could be impacting your score. My husband had to do this as there was an issue on his with an old Internet account. One we had paid at the time but hadn’t been properly accounted for when we closed our account and moved to another company.
Sign up for the electoral roll
Signing up for the electoral roll is very easy to do and makes a big difference to your credit score. Companies use it to confirm your name and address. It’s an easy identity check for them so make sure you do this straight away! It transpired it was the main reason we had been declined! We were still registering as living in previous addresses.
Make Sure You Have Credit
Having no credit can be a bad thing for your credit score. This happened to a friend of mine who had trouble getting a mobile phone contract. Companies like to see that you have borrowed money in the past and are reliable enough to pay it back each month. You might want to take out an instalment loan with a company like Cash Lady or get a credit card. Some companies like to see a mixture of credit types so its worth bearing that in mind when applying for finance. But remember it’s advisable to only go down this route if you find a suitable deal that works for you.
Pay Your Bills On Time
It sounds obvious but it’s amazing how many people don’t follow this advice! Make sure your bills are always paid promptly. Don’t wait for reminder letters! It gives companies a clear indication of how good you are at managing your accounts. Be the reliable person that gets their bills paid on time!
If you have defaulted payments in the past don’t panic. Try and contact these companies and see if they are willing to change the status. Consider offering a reduced final payment. They might just be glad to see some of their money back and be willing to negotiate with you on quite favourable terms. It’s worth it if you can remove that mark off your credit report.