Struggling to get a credit card, car or new phone contract? Here’s how to improve your credit score and convince lenders that you’re likely to pay your loan on time…
You’re aiming for a good credit score of 700 or an excellent 800, on a range between 300 and 850. Experian have plenty of information about how your credit report is used and what it means, but here’s how you can improve your credit score for peace of mind and a stronger financial position.
1. Check your credit score is true
Call Experian or contact major credit reference agencies like CallCredit via the Noddle website or Equifax for a copy of your credit report – you have a legal right to see it and check for fraud. If you spot a mistake, such as credit card someone else has taken out in your name, lodge a complaint with the credit reference company you got your report from – giving them 28 days to remove the information or explain what the problem is.
Should they refuse to correct the mistake, because you don’t have enough evidence for example, put your own ‘notice of correction’ on your credit report. Marking it as ‘disputed information’ like this will stop lenders from judging you negatively because of it, when you apply for credit.
2. Register to vote
It’s your prerogative whether you cast it or not, but register to vote online at Gov.UK or contact your local registration office to improve your credit score. Being on the electoral role at your current address helps prove that you are who you say you are – to lenders who are wary of credit and identity fraud.
3. Always repay on time
Late repayments dent your credit score, so stick within your credit limit. Why not set up a direct debit to automatically take payments out of your account each month? Your bank can arrange it for you, be they HSBC or Lloyds Bank, Halifax or any other bank. If you’re struggling with debt, you don’t have to suffer alone – seek expert advice from the likes of Step Change Debt Charity, Citizens Advice or Gov.UK.
4. Only apply for achievable loans
Take advantage of Experian’s ‘soft search’ to find loans that you have the greatest chance of cashing in, without lenders seeing your search. If you’re turned down for a credit card or personal loan, wait before applying again – applying for several in quick succession will harm your credit score. Of course, your very best option is to focus on resolving your outstanding debts and improving your credit score before applying for yet more credit.
5. Close accounts you don’t use
Lenders will think your debt is out of control when you have too many accounts. So close the ones you don’t use and cut up your card.