From detaching your finances and raising your credit limit to pausing applications and querying your report, we’ve got seven tips to help improve your credit score.
When it comes to landing the best credit deals, your credit score really does matter. Whether it’s the interest rate, credit card limit or mortgage you’re offered, the better your score, the better your terms are likely to be, and the more likely you are to actually be accepted in the first place.
If you’ve had problems managing money in the past though, you might have marks on your credit history holding you back - but don’t worry, all is not lost. In this blog, we’ve got seven tips that’ll help you start to improve your credit score in as little as 30 days.
Your credit report
First things first, you need to take a look at your credit report. Within this, you’ll be able to see certain information that could be causing your credit score to slump, like:
How many credit accounts you have open
The number of credit applications you’ve made
Whether you’ve missed or made late payments
How much of your available credit you’re using
Whether or not you’re on the electoral roll
If you’ve been the victim of identity fraud, and more.
Having this kind of detail to hand will help you work out which areas you need to improve on, which will dictate the ‘how’.
7 tips to improve your credit score
1. Remove false information
If you’ve been falsely accused of making a late payment or missing one altogether, contact the credit reference agency and ask them to correct it. In the first instance, they’ll contact the company in question and ask them to look into your query, and while the investigation’s going on, they’ll add a note to your report to let lenders know it’s being looked at.
On the basis the company holds their hands up and admits they made a mistake, an update should be sent - by them - to all credit reference agencies requesting they update their records.
If they don’t agree with your dispute, although the mark won’t be removed from your report, all’s not lost. You can add what’s called a ‘notice of correction’ to your file for lenders to take into consideration.
2. Pay off some of your credit card debt
Your credit utilisation ratio describes the amount of credit that’s available to you compared the amount you’re using. The lower this score, the better.
For example, if you have a credit card with a credit limit of £1,500 and you owe £750 on it, your credit utilisation ratio would be 50%.
Tying in with point number two, you could see if your credit card provider will increase your credit limit. If they say yes, even if the amount of money you owe remains the same, the amount of credit available to you goes up – meaning your ratio will go down.
You’ve got a better chance of being approved for a higher limit if you’ve proven yourself to be a reliable borrower – so if you’ve been making payments on time and in full for a few months, lenders might feel more comfortable giving you that extra credit.
4. Make the most of what you’ve got
If you’ve got one main credit card you always turn to, but you’ve also got other lines of credit open that aren’t seeing the light of day, start tapping into them from time-to-time – lenders like to see you’re using them.
This doesn’t mean you have to start splashing the cash for the sake of it, but by making sensible and small payments, you can prove to lenders that you’re capable of managing different types of credit.
5. Stop making applications
If you’ve been applying and applying for credit hoping that one day someone will say yes, stop. Hard searches show up on your credit report and can make you look desperate to access cash. Take a step back, stop applying, and show lenders you’re not in a financial frenzy.
6. If you’re not already, get yourself on the electoral roll
Okay, so you might be cutting it fine to get it pushed through within 30 days, but it’s worth a try and certainly worth doing regardless!
By being on the electoral roll, lenders can confirm your name and address, which can give your credit score a boost.
7. Detach yourself
If you share a joint loan, credit card, current account or anything else with someone who has a poor credit history, see if you can close the product down and remove the person from your report. Although lenders might have no reason to mistrust you, because the other person has access to the same pot of money as you, their checkered past could be holding your credit score back.
So, there are our seven top tips to help start to improve your credit score in the next 30 days. For more credit score-related hints and tips, head over to our dedicated section on it here.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.