Wednesday, 18 April 2018

How To Improve Your Credit Rating

My son will soon be graduating university and I know that one day he will be wanting to move out and get his own place. To get on the housing ladder, he will need a good credit rating so I’ve been looking into how to practically do this. There are a number of things you can do, so this is my guide on how to build a strong credit rating and also how to improve yours if it isn't the best.



Register on the electoral roll


Most of us are probably already registered but if you aren’t, make sure you are. As well as allowing you to vote, being on the electoral roll allows lenders to confirm your identity to prevent fraud and identity theft. If your name isn’t there, it will be much harder to obtain credit in the future.

Check your credit file

You may not think it will happen to you but there may be mistakes on your credit file. Check your credit file with a fine tooth comb and query any incorrect information. Sites such as Experian allow you to check it for free. If it is indeed incorrect and affecting your score negatively, then you want that incorrect information removed as soon as possible and it is the responsibility of the company who placed that incorrect information to remove it for you.

Consider a credit building card

Whilst some providers won’t accept you - especially if you’ve previously had no credit or have a poor credit history - there are others, such as Vanquis, who provide a credit card for people with bad credit. These particular cards are designed to help you rebuild your credit, and whilst the Annual Percentage Rate (APR) may be higher than regular cards they can give you a more positive score as long as you pay on time. 

Pay on time and reduce your debt




There are plenty of ways you can keep paying your bills on time and reducing your debt levels - sell your old possessions on selling sites, do a car boot sale and put every penny into debt, cancel subscriptions you don't use, shop around when you have to buy utilities, or get a second job for example. A second job or side hustle is great for eliminating debt whilst not taking anything out of your everyday income so you can focus on staying up-to-date with those bills too.

Try to stay in one place for a while

People who move around a lot tend to find it harder to obtain credit as lenders often feel more comfortable if they can see you have lived at one address for a considerable period of time. Whilst this isn’t always possible due to people’s circumstances, showing that you have lived in one property for more than a few months at a time gives a very good impression.

These are all ways that you can obtain a fantastic credit score - and improve a not so great one. But why would you want to? Considering buying your first home? Want to land your dream job which requires a financial check? Want to get a mobile phone contract? These all need a decent score and a good score will benefit you many ways as you go through life. Working towards improving it now will certainly be worth it for future you - so why not get started now?

Do you have any tips on how to build or improve a strong credit rating?

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10 comments

  1. It is important. I think staying put has helped my score. I have lived in only 3 houses in the last 20 years.

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  2. Great tips! We’ve just bought a house and I was so nervous about mine. I’m going to focus on looking after mine as I found out it was actually ok!

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  3. Ooh, some good tips here. I've been meaning to check my credit file for years, but get put off by having to pay.

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  4. Such a great tips! My husband and I went through paying off all our debt when we were first married. It was tough times and spending was very limited but it honestly changed our lives for the better and we are so thankful for that decision. It improved our credit score tremendously as well. Using the budget app Mint was a game changer for us! Thank you for sharing!!

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  5. These are fab tips for anyone who is looking into getting a great credit ratings. Sometimes we wonder what we need to do and this post explains things clearly.

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  6. Good tips, I think we underestimate how important this is when we are young but once you want a mortgage it all gets very serious and you need that strong rating. Mich x

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