How to improve your credit score!
Check Your Credit Report Annually or Before Any Major Applications
Errors happen and can ruin your chance of acceptance, so it is important to check your credit report at all three Credit Reference Agencies (CRAs), as different lenders use different agencies, and go through the entire report and check that everything is correct.
Register to Vote
If you are not on the electoral roll, it is much harder to get accepted for credit. You can register at any time on Gov.uk.
Never miss or be late on any credit repayments
Doing this once or twice could cause problems that could cause problems that can cost you years. Defaults in the previous 12 months will hurt you the most.
Avoid Payday Loans - payday loans can kill applications
Not only are payday loans expensive but they also indicate to the lender that you are desperate for money and unable to get a cheaper way of borrowing.
Minimise your outstanding debts
The amount of outstanding debt you have is part of the information lenders have access to, if you have too much debt, then that hurts your file. Think of it this way – would you want to lend to someone who already had a lot of debt elsewhere?
Don't make too many applications in a short space of time
Too many credit applications, especially in a short space of time can make it look like you are desperate for credit and can set off rejections.
Don't let your partners or flatmates score wreck yours!
If you are financially linked to someone on any product, that means their files can be accessed and looked at as part of assessing whether to accept you. Even just a joint bills account with flatmates can mean you are co-scored.
If your flatmate/partner has a poor history, it is better to keep your finance separate as it should maintain your access to good credit. If your finances are already linked and you’ve split up with your partner or moved out, make sure you financially un-link and request for the CRAs for a notice of disassociation.
- Joint mortgage
- Joint loan
- Joint bank account
- In certain circumstances your utility bills
Consider a credit builder card to build up your credit history or restore any past issues
Credit scoring is about trying to predict your future behaviour on your past history e.g. did you meet the repayments on time. If you have no credit history or poor credit history this can be tough. You need to build a decent history to prove that you can be responsible with credit and use it well.
A credit builder card usually has a very high APR, but providing you pay it off in full each month and never withdraw cash you wont be charged interest. A credit builder card is a great way to prove you can be responsible with credit, and use it well.
Minimise credit applications
The only way to know if you’ll get accepted for finance is to apply. At Motor Loans R Us we use a soft search as a first instance, to see if you will be accepted at any of our lenders. With a soft search, you can see it on your credit file but lenders don’t so there is no impact.
Cancel/Close any accounts no longer in use
You may owe nothing of the card but a lender will look at all of your available credit before it makes a decision on your application. However this is not to say close down all of your accounts, long-standing accounts with good credit histories can be a benefit to your credit score so are best left open.