Having a good credit rating is important if you need to borrow money for things such as holidays or mortgages. The first thing that a potential lender will want to know about before deciding to grant you a loan is your credit score because this will help determine how eligible you are for a loan.
Your credit rating can decide things such as how much you will be able to borrow and even how much interest a lender can charge you. If your credit rating isn’t the best, it can affect all of these factors when receiving a loan and more. Here are a few easy ways in which you can increase your credit score.
- Do your Research
Many people fail to realise that not all types of lenders will take your credit rating into consideration when deciding to give you a loan or not. These quick loans will not carry out any formal credit score checks, which means that your credit rating, bad or good, is likely to be accepted. This type of loan will usually be secured on your vehicle, which means that it is incredibly fast, allowing you to use the money to pack up your things and head off to sunny Spain for a well earned holiday without having to worry about your credit score getting in the way.
- Keep up with Repayments
To keep your credit rating in top condition, make sure that you make repayments on time.
If you have struggled in the past to meet repayment deadlines, this will show up on your credit history, making you seem like a risky lender. To avoid this, be punctual with your repayments and your credit score will gradually improve over time.
- Credit Applications
You need to be wise with your credit applications, which means avoiding applying for numerous ones at the same time. If you make a number of applications in a short time period, this could act as a red flag, indicating fraud or signs of money stress. According to Experian a lender is likely to check and “leave a credit application search footprint on your credit report each time you apply for credit”. For this reason, it is advised that you space out your credit applications.
- Electoral Register
Being on the electoral register will do great favours for your credit rating. According to Money Advice Service, if your name is missing from the register you are likely to find it more difficult to get credit. Simply complete the relevant form and leave it at your local electoral registration office.
- Unused Accounts
If you have any unused credit accounts under your name, close them. Lenders will find out how much you currently owe and if you have already paid off one, this will still show up on your account. You need to show that you are a reliable lender and one that requires low risk to potential lenders. You can do this by taking away any long-standing accounts from your account.