Top Tips for Boosting Your Credit Rating
As we covered in our last post, your credit rating is extremely important. Not only does it determine whether or not lenders will offer you financing, but it will also affect the interest rates you are given on loans. For that reason, you’ll want to do all you can to keep your credit score as high as possible. If you’re in serious money trouble, then you might need some expert help to remedy the situation. However, even if your credit score is already relatively high, there are still steps you can take to boost it even further. Whatever your personal situation, try the steps below- you’ll soon notice a big difference!
Keep Up with Loan Repayments
The simplest way to build your credit score is to ensure you’re always on top of any repayments you have to make. Credit ratings aren’t just meaningless numbers- at the end of the day, they are all about telling lenders whether or not you are a responsible borrower. If you can prove that you aren’t borrowing beyond your means, and always make repayments on time, then naturally you will be a better prospect for other lenders, too. What’s more, if you have a strong repayment history already, then a single missed payment won’t have as much of an impact on your score as it would otherwise. Building your credit score in this manner takes time, but it’s the most effective way of maintaining it in the long term.
Sign Up to the Electoral Register
If you haven’t already done so, signing up to the electoral register is a great way to instantly bump your credit score up a few points. Why? Essentially, it’s all about making banks and other lenders feel reassured that you won’t run away from your debts. Giving them an address where they can contact you is one thing, but actually proving that you are tied down to that property takes things one step further. It’s a simple step, but one well worth taking to boost your credit rating.
Look Into Credit-Building Cards
As we already mentioned, keeping up with existing loan repayments is a great place to start. However, if you want to get even greater effects, then you might want to consider taking out a special credit-building card. These tend to come with higher interest rates than standard credit cards, but that’s really the whole point of them. By actively demonstrating that you can keep up with such payments, you’re showing lenders that you aren’t going to pose a risk to them. What’s more, if you pay off your credit card bill early enough, then you can often avoid the high interest rates entirely. Just make sure you do your research first, and avoid going over around 40% of your credit limit, and you should find that this method gets results relatively quickly.
Close Any Credit Accounts You Don’t Use
Many people have credit accounts that they opened years ago, but no longer use- in fact, you may well have forgotten about them entirely. However, in our data-driven world, nothing is ever gone entirely. These accounts will still show up when credit checks are carried out and will usually have a negative impact on your rating. That’s because they suggest you are using up more credit than you actually are- the fact that you don’t use the account anymore doesn’t matter. Rather than letting these accounts lie open and never using them, it’s better to just close them right away, and enjoy the improved credit rating you’ll gain as a result.
Clear any old debts
If you are struggling to keep up to date with your credit/payemnt on loans, overdrafts etc, you can get friendly debt advice here, they can help you to improve your debt score and boost your credit rating.