How to Improve Your Credit Score

09 September, 2021 by Rowan Jayme Wium 4 mins read Category:  Money Personal Finance
Not many people realise how important their credit score is until it’s tarnished and they can’t get credit, struggle to open store accounts, or are denied a home loan. Whether you aspire to be a business owner or just someone who can get credit and loans when required, there are a few things you can do to improve your credit score.

5 Ways to Boost Your Credit Score

Let’s focus on just five tips you can use to start improving your credit score steadily from today.

1. Review your credit reports

Credit bureaus sometimes have the wrong information. The thing is, the information the credit bureaus have will be used to determine your credit score. Make sure all the information on your credit report is correct and dispute any errors.

2. Only use 30% of your available credit

The lower your credit balances, the higher your credit score will be. If you are prone to maxing out every credit card and take out a plethora of loans, it will show lenders one thing: you don’t know how to manage money. On the other hand, if your utilisation is 30% or below, it shows that they can trust you with credit.

3. Take out a credit builder loan

Credit builder loans are typically small loan amounts provided to those who want to start rebuilding their credit after it’s been tarnished. With a credit builder loan, the idea is to pay the loan amount promptly and in full so that the lender can report your good behavior to the credit bureaus. Every time you pay on time and in full, it works towards building a better credit profile.

4. Be a prompt payer

Nothing hurts a credit report more than late payments. Even if you’re a day late, it’s bad news. However, if you pay promptly and in full, it will be recognised as good credit management. If you’re forgetful or sometimes don’t have time to action payments, set up a direct debit with your credit providers to make the payment automatically and on time.

5. Avoid applying for credit when a hard check is involved

When applying for loans, a credit check is carried out in your name. Each lender you approach will gather your details and then contact the credit bureaus to ensure you’re a reliable payer. A note of each credit check will show on your credit profile which can reduce your credit score. If you need to apply for a loan or bridging cash, use a portal where you can input your details just once, and various loan offers can be provided. These sites often do no credit check or just one, saving you’re the hassle of having all those hard credit check notes against your name.

Final Thoughts

Improving your credit isn’t something that happens overnight. You need to work at it consistently and give it time. If you’re serious about rebuilding your credit, you will be willing to put in the work! We encourage you to check back to our blog regularly for future finance tips and advice.
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