Home » Credit, Headline

The 5 Best Ways To Increase Your Credit Score

25 February 2021 No Comment

A good credit score is important to have to boost your ability to borrow money or get products such as credit cards. However, a bad credit score is common and it is something that almost everyone experiences in their life. While it may seem like an inconvenience or a time-consuming task to improve your credit score, it is something that is imperative to do. We have made a list of 5 of the best ways to increase your credit score, some of which take no time at all, so find out how you can improve your rating.

  1. Register On The Electoral Roll

This may seem like an extremely simple step, but if your name is on the electoral roll, it means that the government recognizes you as living at your home address. It also means that it will be a lot easier for finance companies to pick you up in their computerised processes and confirm that you are eligible for credit. Registering will only take a couple of minutes online, but you may need to wait a couple of weeks for confirmation.

  1. Pay Your Bills Or Rent On Time

Forgetting to pay your bills or submitting late payments for bills can really damage your credit score, so we recommend that you make a point to pay on time. Whether it is a phone bill, a utility bill or your rent, consider setting up direct debits or personal alarms to make sure that you pay on time. Not only will this improve your credit score, but it will also help you to relax and stop worrying about payments.

  1. Consider Taking Out A Bad Credit Loan

While it may seem counter-intuitive to take out a loan with poor credit history, loans for bad credit have been designed to help those in financial difficulty without assessing their full history. This means that you can take out a loan, despite your credit score, make payments on time and watch your credit score increase. While this is not an ideal solution for everyone, bad credit loans are based on affordability, rather than credit score, so they are great if you are sure you can make the repayments.

  1. Avoid Making Multiple Credit Applications In A Short Space Of Time

Each time you apply for credit, a hard search is carried out on your credit report, which leaves a mark. If you make too many applications within a short space of time, this could have a negative impact on your credit score, as lenders will see the amount of times you have requested credit. If you are rejected for credit, try to wait a while to increase the gap between applications before you apply again.

  1. Keep Your Credit Utilization Low

The term ‘credit utilization’ refers to how much of your available credit limit you use. For example, if you have a credit limit of £2000 and you have used £1000, your credit utilization is 50%. If possible, you should try to keep your credit utilization under 30% to show lenders that you are able to manage your credit sensibly. You should be able to view your credit via credit check sites and this will help you to manage your credit utilization.

A higher credit score is essential for boosting your chances of approval on financial products and for getting the best interest rates, so it is worth working through this list to see if you can improve your credit score.

Comments are closed.