Have you tried getting important items on credit and were denied? Or are you simply looking to apply for credit products like phone contracts, car finance etc? Either way, you’re interested in improving your credit rating and maintaining a healthy credit file.
We have gathered a list of the top four tips on improving your credit rating. These are actionable tips and will certainly make a difference when practiced.
Let’s get right into it:
1. Get on the Electoral Roll
Credit providers will love to know you are and where you have been for the last few years. Registering on the electoral roll will allow these providers access your information to confirm your name, address and residential history.
N.B: It’s also actually against the law not to register to vote! You could technically be fined up to £1,000 for not doing so.
2. Check your credit file
Though this may seem like the obvious choice, it would be best to check your credit file before you apply for any credit. There could be information on there that isn’t updated and might in turn affect your credit application. For instance, this could be a previous credit provider hasn’t updated your records and it shows you’re still in debt. In such scenario, it’s then advised to contact the provider and get them to update the records.
3. Pay off your debts
Don’t settle for paying just the minimum amount each month; try your best to pay more than that amount as this signifies good behaviour to a prospective lender. It tells them you are managing your debt well and can be trusted with more credit products in the future.
You should consider setting up a direct debit so that you stay on top of your payments as well as paying above the minimum amount.
4. Apply for Credit you’d likely to be accepted for
It’s important to apply for credit products that you’d have a strong chance of being approved. For instance, if you are declined a credit card, don’t try to apply for a dozen credit providers in the hope that at least one will accept your application.
It will reduce your credit rating and you might end up being declined by all the credit providers
For this reason, it’s best to do a bit of research before you apply for credit. Using a free service like Clear Score, you’ll be able to see the range of credit products and the probability of you being successful in the respective credit applications. You can also use Clear Score to check your credit score for absolutely free.
There you have it, our top four tips on how to improve your credit rating.