If your UK credit score is lower than you’d like and you’re struggling to find ways to improve, there are a number of helpful methods that make this seemingly difficult task much simpler. Nowadays, credit score actually defines our lives. If you don’t have a good credit score you are unlikely to obtain a mortgage on a house or gain access to any credit cards or loans.
Well, not many people know that the less a credit agency knows about you and how you are with your finances, the less likely a creditor is going to offer you a loan. If you have previously had loans and payments paid regularly on time then they will know that you have a track record of reliability with your borrowing. If you don’t take out loans or contracts at all then there is no history of reliability and you will have a basic score.
If you choose to take out loans or contracts and miss payments then your credit score is going to drop significantly as this shows that you are unreliable with your money. Be sure to read on and learn more about the following tips, so that you can make the necessary improvements to your credit score as rapidly as possible.
1. Obtain a Credit Report
When you are uncertain about the specifics of your credit score, a credit score agency like ClearScore can provide useful insight. Take a moment to obtain your information, so that you can find out if there any correctable mistakes or if you’ve been a victim of financial fraud. Best of all, ClearScore offers all this for Free! Allowing you to receive this valuable information for much cheaper than the monthly payments on other credit agencies.
ClearScore will provide you with the guidance, tools and tips to improve your credit score. You will be notified of any changes to your score every month. Credit agencies will look to your score to see if you are eligible for credit, by attempting to improve your credit they will see you in a more positive way. Ensure that you are registered on the electoral roll and that all of your details are correct throughout your credit history, as this will harm your score considerably.
ClearScore remains free because of the monthly offers they provide on the app. They offer credit cards, personal loans, car finances and mortgages from different creditors depending on what you are eligible for at the time.
2. Vanquis Cards
Having a poor credit history and a low credit score are not insurmountable hurdles and thanks to Vanquis credit cards, a cardholder can rebuild their score without having to take a potentially harmful shortcut. While your initial interest rates will be higher and your credit limit will be lower, a Vanquis card reestablishes your credit history, improves your credit score and showcases your future viability to other creditors.
3. Cancel Cards You Are No Longer Using
Did you know that having inactive credit cards can serve to lower your credit score? Having unused credit cards will not only lower your UK credit score, but it also leaves you far more susceptible to fraud and identity theft. It is also in your best interests to stop applying for credit cards until your current financial situation has been straightened out. Having applications repeatedly declined is a major red flag to potential creditors.
4. Make Repayments Early
A UK credit score does not improve overnight and you will need to instil stronger long-term financial habits to show your former and future lenders that you’ve mended your ways. By making repayments early and not allowing your balances to carry over from month to month, you are now showing potential lenders that you are a financially sensible borrower. Just be sure to keep some pounds and pence in an emergency account in case of a rainy day.
5. Steer Clear of Credit Repair Companies
We’ve all seen the dodgy adverts for companies that promise to repair our credit scores for a small fee, but these companies are far from trustworthy. Many of these businesses will make outlandish claims that they cannot live up to, and others openly encourage their clients to lie to credit agencies. Improving your credit score may be a somewhat challenging process, but it is well within your grasp to complete this task on your own. Bear in mind credit score agency are increasing their ability find a person who is considered providing ‘fraudulent data’ and this will no doubt hinder your score to disaster.
6. Pay Any Overdrafts or Credit Cards Off As Soon As Possible
Removing any debt will improve your credit score in the long run. Coming up with a payment plan will help dividends, make sure you include the interest that has been agreed by you and your creditor. It would be of most importance to pay off the debt with the highest interest first, this will mean that you save more money in the long run.
7. Never Miss/Avoid a Bill
Credit agencies have certain criteria to follow too. This allows lenders to feel more confident about offering money to others. One of the most valuable tips to improve or at least avoid a drop in score is never to miss out on any payments. If you have defaulted on a payment, this will stay on your credit file for more than two years and will affect your chance to receive a loan. Even if you have agreed payment with a creditor, failure to pay on time will still affect your score, this can be seen on your Credit Score account.
8. Reduce The Amount Of Credit Applications Made
When you are looking around for the best credit products, you must keep in mind that applying for too many in a short period may effect your score negatively. This may show the credit agency that you are in financial struggle or even attempting fraud. There are two types of searches that are made by the creditor. They are a soft search and a hard search:
Soft Search – These type of searches are routine, and they may be used to confirm your details when taking out insurance. When this search is completed, it will not affect your credit score at all. However, it will stay on your profile for 12 months. Soft searches are mainly used to give you an accurate quote on a loan, insurance quote or interest rate. Natwest and Barclaycard are well known to offer customers a ‘soft search’ facility to give them a rough idea of prices. If it’s determining if you will be accepted for credit, then the creditors will attempt a hard search.
Hard Search – This search is visible by other creditors and may effect your credit score, you will be notified when a credit check is taking place.
9. Using Too Much Of Your Available Credit
Your credit score will improve if you can successfully increase your credit limit on your card. However, if you are always using a significant percentage of this credit, then credit agencies will look at this negatively. The fact that your bank has given you a high credit limit and you only use a small amount of that limit a month will help your credit score significantly.
10. Sign On To The Electoral Roll
Signing onto the Electoral Roll shows creditors a location where you live thats on official record. This will improve your credit score as creditors can identify that you are who you say you are. They will also be able to know your location if you ever default on payments.