How To Improve Your Credit Score

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Rates from 6.9% APR. Representative APR 27.4%
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5 years
Total cost of credit £ 2000
Total repayment £ 2000
48 monthly
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£ 245 98

Rates from 6.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £6,500 over 5 years with a representative APR of 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £166.07 per month, with a total cost of credit of £3,464.37 and a total amount payable of £9,964.37.

What is a credit score?

Your credit score is one of the tools that lenders can use to find out what kind of borrower you are. You might also see it called your credit rating. It’s a three-digit number that’s used to represent your payment history and how likely it is that you’ll be able to manage your repayments.

Everyone’s score is personalised and calculated by a credit reference agency. The agency takes information from your credit report and sends it through a mathematical model to come up with a number that represents your credit history.

There are three main credit reference agencies in the UK – Experian, Equifax, and TransUnion – and each one calculates your score differently, using different information.

No matter whether your score is good or bad, it’s never fixed. In fact, it can change depending on the day that it’s checked or even the type of credit you’re applying for.

How can I check my credit score for free?

Credit scores aren’t fixed, so checking your report regularly is a good habit– especially if you’re thinking about applying for car finance.

As each of the three credit reference agencies calculates your score differently, you could check your credit score with all three to get a clear picture of how you’re doing. You probably won’t know which agency your prospective lender uses, so it’s worth double-checking that the information each has about you is correct.

There are a few different ways to check your credit score online.

CreditKarma (using TransUnion data) and ClearScore (who use Equifax) will both provide you with a free credit check.

If you’re looking for more detail, both Experian and Equifax offer in-depth credit reports. This is a paid-for service, although you can get a free trial. You’ll have to enter your card details to use the trial so don’t forget that money will be taken from your account if you don’t cancel before the free trial ends.

How to improve your credit score

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.

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. 

How to protect yourself from identity theft

Unfortunately, identity theft can impact your credit rating. In fact, you may not even realise that your identity has been stolen until you check your credit report.

Checking your credit report regularly can help you spot theft early, but you can also take extra steps to protect yourself from this type of financial fraud:

  • Restrict the amount of information you share online e.g. your date of birth
  • Don’t use the same password for every account
  • Look out for emails from websites you haven’t registered with
  • Check your bank account regularly and look out for unusual transactions

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CarFinance 247 is a trading name of CarFinance 247 Limited, a credit broker and insurance intermediary, and 247 Money Group Limited (247 Money), a lender. Both companies are part of the 247 group of companies.

CarFinance 247 is authorised and regulated by the Financial Conduct Authority under reference number: 653019. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 06035525. Data Protection Registration Number Z1897658.

247 Money is authorised and regulated by the Financial Conduct Authority. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 10989530. Data Protection Registration Number ZA456831.

All finance is subject to status and income. Written quotations on request. CarFinance 247 can introduce you to a limited number of finance providers, including 247Money, based upon your credit rating and will receive commission for such introductions.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this

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