Having a higher credit score can help when it comes to being approved for financial products with good interest rates. For example, someone who is applying for a credit card with a low credit score is likely to be offered a much higher rate than someone with an excellent score. Figuring out what credit score is needed for a loan might shock you, as you might find that your current position is holding you back.
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It’s always worth working on your credit score and making it as good as it can be, you never know when you may need to rely on it:
Use A Credit Cared Litten But Often
Using a credit card often but very little is the key to growing your credit score. By keeping it active and only spending small amounts you can ensure that you can pay the bill off every month. It makes you appear more responsible and attractive to lenders, it can also help to boost your score. This is because it shows them you can pay the money back reliably.
Watch Your Credit Utilisation Low
In order to get a better credit score, you need to try and keep your available credit as low as possible. Keeping your utilization low, ideally below 25%, shows lenders that you are able to control your credit sensibly. It’s easy to keep track of how much you are using if you watch your credit score and download any apps for your accounts.
Look For Credit For Your Rating
There is going to be different credit available for different credit ratings. Although for a bad credit rating the available finance might have a higher apr, in the short-term if you manage this well it can improve your score and you could always look to refinance in the future. You should also look for finance that is suited to your score, for example, if you are looking for a new car consider someone like Allen Hyundai, who is able to look at low credit options.
Correct Any Mistakes
Your credit score is based on all the information that is held in your credit report. If any of this is wrong, it can have an impact on your score. This could mean that your score is lower than it should be. Keeping an eye on your credit score means you are able to spot and fix any mistakes, this could, in turn, improve your score.
Avoid Making Numerous Credit Applications In A Short Space Of Time
Each time to apply for credit, a ‘hard search’ is taken out on your account, and this is marked on your credit report. If you make numerous applications in a short space of time, this could have a negative impact on your score. It can also make lenders think you are desperate for credit. If you are rejected for credit, try not to apply to multiple different lenders. Instead, wait it out, and apply again in the future. Using tools such as an eligibility checker can help you avoid making too many applications.
Use Eligibility Checkers
You can decrease the risk of getting refused credit simply by using an eligibility checker. It will perform a soft search rather than a hard which won’t affect your credit rating. You’re the only one who can see a soft search on your account. An eligibility checker shows you how likely you are to be accepted for the credit you want to apply for. If your chance is low, you may want to avoid applying until it improves. It also helps to clearly show you all your options without you needing to shop around.
Get Your Name On Some Bills
If your name isn’t on any of the household bills such as utility bills, or mobile phone bills, you should think about getting your name added. They count as a form of credit and are great ways of showing lenders you can pay your bill ont time every month. Just make sure you so pay them on time each month, otherwise, it could risk you damaging your score more. If you are contributing to a bill, it’s only fair that you get the advantages that come with doing so.
Pay On Time Every Time
If you forget to pay a bill or miss your payment date, it can have a bad impact on your score. It can suggest to lenders that you are struggling to manage your credit effectively. If you want to avoid this, you should set up direct debits, this way you can sit back and know things are getting paid. Your credit score will also be better for it. If you know you are going to be unable to make a payment, it is important for you to contact the lender and inform them as soon as possible.
Watch Out For Fraud
Although it may be rare, identity fraud is something that happens, and it can be a huge problem. If you become a victim, this could be extremely damaging to your credit score. You are becoming responsible for someone else’s actions. It can happen at any time, but if you move home, change jobs, or throw away cards, be more vigilant. Monitoring your credit score means you can spot signs of fraud sooner. If you spot anything that is abnormal or you don’t recognize make sure you report it straight away.
Make Sure You Have Good Control Over Your Finances
One of the best ways for you to get a handle on your credit score is to have good control over your finances in the first place. Make sure you know exactly what is coming in and going out each month. Have a look a building a budget that is realistic and enables you to save. However, you should make sure you pay down any debts before saving excessively.
Track Your Spending Habits
Making an effort to track your spending habits will help you to keep control over how much money you pay out every month, as oftentimes it’s far too easy to tap your card and let your account drain without even acknowledging the price tag. Keeping a diary can show you how much you spend and give you the shock you need to slow down and put a rein on your spending habits, and you can even set yourself a goal to stay under each week to make sure you still have some extra funds left over in your account. Regularly creeping into your overdraft or having little to no money in your account will wreak havoc with your credit score, so any method that helps you avoid this is totally worthwhile.
Get Registered
In some cases, failing to be registered on certain lists can stop you from achieving a higher credit score. An important list that you must register on to maintain a good credit score is the electoral roll, as registering to vote can improve your chances of getting approved by lenders. Registering to vote means that your information is certified and readily available, proving your authenticity in the most efficient manner possible – this is exactly what lenders look for and it can boost your credit score too, so make sure you’re registered now to reap the benefits.
This short guide should help you to start looking after your credit score and making improvements. As long as you monitor it and put protective steps into a place you should see it grow. Do you have any other tips that could help? Please share some of your tips in the comments below.
