5 ways to improve a credit score
If a credit score sounds boring or alien to you, you’re not alone. But whether you like it or not, having a good credit score can be very important to grown up life. So here are our top tips to help you improve your credit score.
If you need recap on what a credit score is first, check out our previous article: What exactly is a credit score?
1. Pay your bills on time
This may seem obvious but it’s easy to get caught up in the rush of modern life and forget when your bills are due. All bills, no matter how important or expensive, show how reliable you are with your money so will still contribute to your credit score. It can be easier to avoid being charged any late fees and damaging your credit score by paying bills via a direct debit. This way, even if you forget, your bills will be paid on time. You can also set up monthly alerts on your phone to let you know when a bill is approaching.
2. Prioritise
If you’d love a brand new phone contract this month but know that you’re saving up to get your car on finance soon, applying for both may hinder your credit score. If a company see that you have made several applications for credit in a short space of time, it could look like you are over-reliant on credit and they may flag you as a potential risk. It’s a good idea to prioritise what you need and think about the most sensible times to make your applications.
3. Check your credit files
Your credit file contains all the data that determines your credit score. You can ask to see yours from any of the three major agencies — Experian, Equifax or Call Credit. This gives you the opportunity to have a look through and spot any mistakes that could harm the future applications you’d like to make. Since the implementation of GDPR, you can now access all the information that a company holds on you for free. There’s plenty of advice online, but it should be as easy as sending an email. If you’d like some more info on how to do this the Money Advice Service have a handy guide to help.
4. Check your eligibility before you apply
Lots of online comparison sites and credit providers now offer you a soft check. A soft check will look at key information about you and assess whether you fit the outlined criteria for the financial product you would like, which will determine whether you are accepted. If you apply for a financial product and are declined this will harm your credit score and reduce the chances of a company accepting you in the future. That’s why it’s so useful to be able to see if you’ll be accepted in advance.
5. Take your time
Credit scores generally aren’t improved overnight. If you’re building credit history from scratch, it can take three to six months of activity before a credit score can be worked out. Similarly, if you’re recovering from bad credit it may take time to restore the trust of lenders and show you’re back on your feet again.
So, wherever you’re building your score from, stay patient, keep on top of your spending and you should see your credit score improve with time.
CATCH 22: What if you want to build your credit score but your credit score is too low to even get a credit builder style card?
