Credit scoring isn’t an exact science and each agency uses a different algorithm to calculate your score. Even so, there are a few steps you can take that could help to improve your credit score with all the credit reference agencies.
Here are 6 things you can try to improve your credit score:
Pay your bills on time
One of the factors that can raise a red flag on your credit report is missed payments. Missing just one could impact your score. If you find that you often forget a payment or find your bills stacking up at the end of the month, you could try setting up direct debits to take money automatically or move your payment date to the same day each month to see if that helps you stay on track.
Check for mistakes on your credit report
Getting in the habit of checking your credit report can help you quickly spot mistakes and potential identity theft if there’s a credit application you don’t recognise. You could find that a small mistake could be making a big difference to your overall score. If you’ve found an issue with your address or a payment that you don’t remember missing, get in touch with the relevant credit reference agency as soon as possible.
Don’t use all your available credit
Maxing out your credit cards every month might not be helping your score. Of course, some months it’s unavoidable, but if you can, using a smaller percentage of the total credit you could borrow lets lenders know that you could be a more responsible borrower. That’s also why closing credit cards that you don’t use much won’t necessarily improve your score.
Don’t apply to a lot of different lenders at the same time
Every time you make an application for credit, the lender will leave mark – known as a hard search – on your credit file. Having many hard searches could impact your score. If you can, try to leave a gap between credit applications. This is especially important if you’ve been rejected by a lender and then make another application shortly after.
Register to vote
If you’ve registered to vote, you’ll be on the electoral roll. If not, you can register online for free. The whole process takes minutes and it’s one of the easiest steps you can take to improve your credit. Make sure you register at your new address every time you move too to keep your credit profile up to date.
Check your financial links
Just because you live with someone, or even if you’re married, your finances aren’t automatically linked. It’s only when you take out a form of finance with someone else – a joint credit card or mortgage, for example – or act as a guarantor that your finances become linked. Anyone you’re financially linked to can impact your credit score. Check who you are linked to on your report and keep your credit score in mind when considering taking out any new joint credit agreements.