Your credit score is what dictates what your credit limit on credit cards will be, the amount you can borrow successfully with loans, and how likely you are to be approved for a mortgage. It governs most of the financial products in our lives, so having a sub-optimal credit score and feel like you’re locked out of some areas.
If you’re looking to bring your credit score up into a good rating to improve your chances of getting access to the products you need, there are a few quick things you can do to improve it. This all starts with downloading your credit report from one of the main credit reference agencies (CRAs) so you can start to understand your current credit position.
Register on the electoral roll
Having your name on the electoral roll can make it easier to get credit, as you are officially registered and can be found during searches. Use the GOV.UK site to register to vote online, or you can submit an application by mail.
Update your details
Sometimes having the wrong details on your credit file can have a negative impact on your score. Review all your details and set anything that’s incorrect right. This could include something which came from fraudulent activity, so if you spot any activity that definitely didn’t come from you then it’s best to contact the credit reference agency.
Get your bills paid on time
Any outstanding bills which have built up over time will likely have an adverse effect on your credit score. Make sure you clear any backlog and pay your household bills on time to show you can reliably meet monthly payments.
Clear unpaid debts
If you’ve borrowed money previously and have debts that need to be paid off, try to clear these off as best you can. You can seek out debt advice on how to consolidate your debts and then pay this off monthly in a more efficient way.
Keep your use of credit low
If you have an existing credit card, try to limit how much you spend on it. Using a lower percentage of your overall credit amount is looked on better by lenders. Aim for 25% at most.
Using a credit card for spending that is well within your existing budget and clearing the balance at the end of each month displays to lenders that you have a good grip on your finances – and can lift your credit score in the process.
These five areas can start to repair your credit score and get it moving in the right direction over the course of six months or so. With a little patience and careful spending, you can get yourself into a better financial position and start potentially getting approved for the financial products you want.