Whether its mortgages, loans, cars or smartphone contracts, credit is increasingly important to modern life. Organizations will assess whether an individual is suitable for credit using a number of criteria, one of which being a credit score. Utilising your financial history, credit scores are numerical values, indicating how much risk you pose as a potential borrower. Therefore, the better your credit score, the more options you have.
After many years of austerity and now in a post-covid and post-Brexit world, the cost of living is rising at an exponential rate. Therefore, more people are seeking credit than ever before. However, with many struggling financially, it can be extremely easy to decimate your credit score with a couple of late payments or applying for too much credit in a short time frame.
Fortunately, there are many ways in which you can improve your credit score, ensuring that help is available if and when you may need it.
Register to Vote
Attempting to improve your credit score can often take time and effort but for those who aren’t registered to vote, the simple act of registering can have an instant effect. According to experts, just registering to vote on its own can boost your score by 50 points. It’s also worth noting that those who have moved should make sure that they’re registered to vote at their new address.
Pay on Time
Obviously, one of the main actions that will affect your credit score is late or missing payments. A good way to avoid this is to set up a direct debit, ensuring that the payment will be made, whether you remember the deadline or not.
Of course, there are instances in which payments can’t be made and in these cases, individuals should contact the lender and try to arrange a new payment plan. Missing one payment can have an effect on your credit score but it’s likely to be mild. However, regular late or missing payments can be extremely detrimental and show up on your account for up to six years.
Check Your Records
From time to time, there will be errors on credit records and these can affect your score. Use the main credit reference agencies to check your credit file. If you see anything that doesn’t look right, you can contact the party involved and try to get them to amend the error. Remember, even the smallest of mistakes can drag your score down.
Soft Application
Every time an individual applies for credit, this is recorded in your record and will have an effect on your credit score. This is particularly problematic when you make multiple credit applications in a short period, as it gives the impression of financial trouble.
Fortunately, there are ways in which you ascertain whether you’re eligible for credit, without it affecting your rating. For example, many lenders will offer a “soft search” or you can use a third-party eligibility checker.
Improve Your Score
There are many ways in which to avoid damage to your credit rating but what happens if the damage has already been done? When it comes to rebuilding your credit score, it can take time but it’s possible as long as you continually avoid risk. You also need to show that you can successfully receive credit and then pay it back on time. One way to do this is to apply for a credit card, use it for regular, sensible purchases and then ensure that you make your repayments each month. There are even specific credit-builder credit cards available, for this exact purpose.
Attempting to improve your credit score can feel like an uphill battle. Thankfully, the experts at U-Deliver offer a comprehensive range of financial services with solutions for every problem.
