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Improving your credit score can open all sorts of new financial doors for you. Here are some tips to do so.
1. Distance Yourself From A Former Financial Partner
Had you opened a joint bank account or taken a joint mortgage with your husband/wife or partner? Opening a joint account together links both you and his/her financial status, hence has a direct effect on your credit rating. This means your ex-partner might take you down with him/her if they have bad credit, one of the reasons you should de-link your financial status from them as soon as the union is no more. All you need to do is contact and inform the credit reference agency of the same. Doing so means you can work your credit rating with no one pulling you down.
2. Register As A Voter
While it may seem unrelated to your credit score, registering yourself as a voter does increase your chances of getting financing from primary lenders. Credit reference agencies and prospective lenders use these records to determine if you are who you say you are, and even know where you live. With this in mind, you need to use the correct details when registering as a voter. It would help if you also used the same names, address, and employment status for all your credit records, including bank accounts.
3. Close All Mobile Contracts, Store Cards, Direct Debits, And Credit Cards You No Longer Use
Any active but unused store cards, mobile contracts, and credit cards stretch your credit limit and might have an impact on the total amount you can borrow. Lenders will also cross-check this when processing your loan application, another reason you should consider closing down all unused accounts and credit cards. Cutting the physical cards into two doesn’t mean the account isn’t active. Make a list of all store cards, mobile contracts, credit cards, and direct debit cards you no longer use, then contact the respective providers to ask them to close them down.
4. Make Timely Bill Payments And Loan Repayments
Making a late payment, or missing a repayment altogether is bad for your credit score. That said, you want to make sure all accounts are set up on time and make a habit of making timely bill payments. The same applies to any loan repayments you may have. Contact the credit provider if a late payment wasn’t your fault, such as if the direct debit account wasn’t ready on time.
5. Start Building Your Credit Now
Anyone (even those with bad credit) can build their credit rating up from scratch. There are a number of bad credit loans and credit builder credit cards that you can use to build your credit. One of the advantages of credit builder credit cards is that they are interest-free for as long as you make timely payments for the same.
Bad credit loans are designed for people with little, bad, or no credit history. These loans, however, have more restrictions and significantly higher interest rates. They, however, can come in handy when appropriately managed. Be sure to compare rates from various providers before settling for one.
6. Pay Your Debts Off
This is a straight forward way of improving your credit score. All you have to do is make payments on time. You can even pay more than the minimum amount required to help offset the loan. Be sure prepayments don’t attract a fine before making the payments.
7. Use A Credit Card To Build Your Credit History
This is particularly useful for individuals with no credit history at all. Without a credit history, lenders wouldn’t be able to find your score, making it hard for them to determine if you qualify for a loan or not. Nonetheless, you can use a credit card to help build your credit score up. All that is required is apply for one, then start making purchases using the card, them repaying the balance by the end of the month.
8. Limit The Number Of Credit Applications Per Go
Credit reference agencies get a notification each time a lender does a credit search on your name. Several credit searches per month can affect your credit score, a reason you need to space out loan applications as much as you can. It pays to know your probability of having a loan approved before applying. You can apply for car finance 24/7. The trick is to only apply for credit when you really need it.
9. Repair Your Credit Using A Prepaid Card
You could use a prepaid card to repair your credit score. The advantage of using this method is that no credit reference is required when applying for one. The fact that you don’t borrow funds from it makes it safe to use. A credit builder prepaid card may also come in handy for repairing your credit score too.
