How To Improve Your Credit Score

How To Improve Your Credit Score

If you’re looking to boost your credit score, there are several steps you can take to improve it. In this article, we’ll look at 10 tips that can help you.

1. Verify your current address. Make sure you’re registered on the electoral roll at your current address and do so even if you’re living in shared accommodation or with your parents.
2. Establish a credit history. If you have little or no credit history, it can be challenging for lenders to evaluate you, which can result in a lower credit score. This is particularly true for young people and individuals who are new to the country. Fortunately, there are ways to establish a credit history that may help improve your score.
3. Pay your bills on time and in full. Making regular and timely payments on your accounts is an effective way to demonstrate to lenders that you are a responsible borrower who can manage credit responsibly. It’s also worth noting that old, well-managed accounts can potentially improve your credit score. However, it’s important to be aware of the possible effects of having unused credit cards, so make sure that you are informed on this topic. Read more here about managing your debt: Will entering a DMP affect my credit rating?
4. Maintain low credit utilization. One important step to improving your credit score is to maintain a low credit utilization ratio. This refers to the amount of credit a person has used compared to their credit limit. For instance, if an individual has a credit limit of £2,000 and has utilized £1,000 of that, their credit utilization ratio is 50%. A lower ratio, typically below 30%, is generally viewed more positively by lenders, which helps to improve your credit score. 
5. Explore the option of getting an instant score boost. Some providers offer you to link your accounts which can be a great way to improve your credit score quickly and easily. Doing so allows our team to assess your financial behavior, such as timely payments towards your bills like Netflix, Spotify, and Council Tax, as well as contributions to savings or investment accounts. This data can then be shared with participating lenders when you apply for credit, potentially improving your chances of being approved.
6. Review your report and check for any errors. Even minor errors, like an incorrect address, can have an impact on your credit score and potentially cause a lender to reject your credit application. It’s important to review your credit report periodically to ensure that all the information on it is accurate and current. Should you discover an error on your credit report, it’s important to take action promptly to have it corrected. You can contact the provider directly and request that they make the necessary changes. If you require assistance, we can help you raise a dispute with the provider on your behalf. Also note that if there is any negative information on your report that is accurate but arose from special circumstances (such as a period of hospitalization or job loss), you can request that a Notice of Correction is added to your credit report. This can help to explain the situation to potential lenders and may help to mitigate the impact of the negative information on your credit score.
7. Keep an Eye Out for Fraudulent Activity. It’s crucial to monitor your credit report regularly to detect any signs of fraudulent activity. If fraudsters obtain your personal information, they may be able to open credit accounts in your name without your knowledge or consent. If you spot any unfamiliar or suspicious activity on your credit report, such as an application you don’t recognize, contact the provider’s fraud support team immediately as they will be able to assist you in addressing the issue.
8. Limit your home moves. While it’s not always feasible to avoid relocating, it’s worth noting that lenders prefer to see consistency and stability in your living situation. Frequent house moves may give the impression that you’re having difficulty paying rent, for example, and could negatively impact your credit score.
9. Maintain old credit accounts and build a long credit history. Demonstrating your ability to effectively manage several credit accounts, particularly over an extended period, can work to your advantage when seeking credit. Most credit scoring models tend to reward individuals who have well-established, long-standing credit accounts and who only use a small portion of their available credit limit. It’s generally advisable to keep your old credit accounts open, even if you’re not actively using them.
10. Consider obtaining credit builder cards. If you’re working to enhance your credit score, a credit builder card can be an excellent option. These cards are designed to help you restore your credit history. Credit builder cards typically come with low spending limits and higher interest rates, making them an accessible option for individuals with poor or no credit. Keep in mind that when you first obtain a credit card, your credit score may initially drop, but consistent and responsible usage can help raise it over time.

Guest Article.