5 Ways To Achieve a Higher Credit Score

| November 8, 2013

how-to-improve-credit-score1We all know how important it is to establish a strong credit rating, as this will enable you to apply for loans, car finance, credit cards and other financial services. Credit rating is essentially a score that goes from o to 1000 and is used by creditors to establish how credible and reliable you are. In the UK the system is rated in the following categories:

Very poor: 0 – 560

Poor: 561 – 720

Fair: 721 – 880

Good: 881 – 960

Excellent: 961 – 999

The find out what your score is you can go to Experian.co.uk. Like most of us, you might need to some work to get up to a high credit rating, so here are 5 tips that will help you achieve a higher credit score:

Address Consistency

Make sure that all of your bills, work contracts, phone contracts and other service contracts are registered to the same address. If you have multiple addresses it will show up on your credit profile and will make your lifestyle look very dispersed. Needless to say this will be very unappealing to lenders. You can check out your profile by going to Experian (if you live in the UK).

Pay Your Bills on Time

A very important factor that can drastically improve or reduce your credit rating is being your bills on time. If you struggle to pay your bills on time because you don’t have enough money to do so, try reducing the amount you have to pay each month by negotiating with your creditors or service provides, or try to consolidate all your bills on a credit card and make manageable payments each month. This will really determine how strong your credit score will be and will certainly benefit you in the long run. Another good tip is setting a reminder on your phone for at least 5 days prior to the bill to be paid.

Bills of the past

Some of us might be unaware that we have an outstanding bill or miss payment that might be damaging our credit profile. This can happen when you move from one address to the other and you forget to notify your creditors or service providers. This means that you still owe money to these companies but they have no way of tracking you. But the bill will still be there. The first thing you should do is find out whether you have any outstanding debts or CCJs by getting a copy of your credit file. If you do have any outstanding payments but you can’t afford to pay them all off in one go the best thing to do is contact the creditors and negotiate a payment plan that is suitable to your financial situation. After all, some money is better than no money.

Electoral Role

Your address history is also a very important factor which can affect your credit score. Lenders are looking to lend money to individuals who are in a stable life and one of the ways this can be evidenced is by having the same address for over 3 years. Needless to say some things are out of our control, and personal circumstances might not allow you to use the same address for 3 years in a row. One thing you can do is to register yourself on the electoral role which will give you credibility and traceability. Creditors are less likely to lend if they can’t trace you.

Don’t apply too many times for credit.

If you apply too many times for a credit card or personal loan, and keep getting rejected, stop! You must allow at least 3 months until you re-apply and do your best to discover why you were rejected in the first place.

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Category: Credit Score

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