How to improve your credit rating

Your credit score is so important and is sometimes something that is overlooked until you need it. Buying a house, getting a credit card and even a phone on a contract can be affected if your score isn’t very good. Plenty of little things can contribute to a bad credit score and some that may surprise you. For example, years ago, I didn’t know that you can get a bad credit rating through people that you are financially linked to, until it was too late. If you have got yourself into debt, it can be tempting to borrow more to try and sort out large amounts that are owing but that often leads to people owing more and more in a vicious cycle. Large repayments on amounts borrowed in multiple places are a recipe for disaster and every missed payment will just contribute towards a worsening score.

So if you have found yourself in a position where you have a less than ideal credit score and are wondering just how to start fixing it and improve your credit score, read on.

Check your credit report

First things first, check your credit rating. You can obtain a copy of your credit report free, from many online services such as Experian. Even if you discover that it is low, then at least you know and can start making steps to improve it. 

Fix any problems

If you notice any inaccuracies this could be affecting your overall score.  You can then contact the companies and update your information. 

Stay still!

Once you have made sure that everything on your file is correct, stay in the same house, and try to keep all of your details the same. A little tip is to get a landline phone number too as credit companies see this as a further connection to your property.

Look Into Consolidating debt

Consolidating your debt into one place makes it easier to not only pay off but to avoid missing any payments. Don’t be tempted to take out more than you need. Use your new loan to pay off your outstanding balances. You then repay only one payment on a monthly basis and in general, you’ll replace your old loan’s interest rate with a new, lower one. Click here to find out more. 

Register on the electoral roll

This is one of the most important things to do. Along with making sure that all of your credit is linked to the correct, current address. 

Apply for credit

Apply for a credit card, use it and pay it back in full. Even if it is a high interest, low amount card, if you use it and pay it back in full each month you are showing that you can be trusted with borrowed money. 

Never use payday loans

Although these can seem like a quick and easy solution, they aren’t. The high APR can quickly rack up huge repayments and put you into further debt. 

Never miss a payment

A default is registered on your account for 6 years and can have a serious impact on your score. 

Sever any negative financial ties

Other people’s bad credit can affect yours, so make sure you are not financially tied to anyone who is harming yours. If you have a partner who is not very reliable with money, check and financially disassociate yourself from them. Do not open any joint accounts together. 

Get a mortgage

If you can get one then this shows other lenders that you are trustworthy. 

Get married

Getting married and linking with someone else who is a responsible borrower will in turn help your credit rating. 

What do you need to do to reach a good credit score?


Disclaimer: This is a collaborative post.

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