How-to-improve-your-credit-score

How To Improve Your Credit Score

Want to improve your credit score? Your credit score is a key factor in determining your financial health. A good credit score can help you get approved for loans and lines of credit, and can also help you get better interest rates. A bad credit score can make it difficult to get approved for financing, and can also result in higher interest rates if you are approved.

In this article, we will look at ways that you can improve your credit score.

Table of contents:

    What Is a Credit Score?

    A credit score offers you an insight into how companies see you when applying for credit. A good score is between 881 -960, while an average score is between 721-880.

    Where Can I Check My Credit Score?

    You can ask for a free copy of your credit report from Experian, Clearscore, TransUnion, and Equifax. You may be able to ask your bank.

    There are several things you can do to improve your credit score.

    1. Register for an electoral roll to provide proof of where you live. Use your current address.
    2. Build your credit history so that companies will find it easier to assess you.
    3. Manage your accounts properly by paying on time and in full every month. This will increase your reliability as a borrower.
    4. Keep your credit utilisation low, below 25%.
    5. If possible, connect your account to a credit score provider. They might be able to help increase your credit score.
    6. Check your credit score report and see if there are any errors or mistakes. Make sure to report it to the provider immediately.
    7. Try not to move homes often.
    8. Keep an eye on your credit file for fraud.
    9. If you have old accounts, keep them open. This shows lenders that you can manage several accounts well over a long period.
    10. Get a credit builder card. Use it for small spending each month, because it helps to rebuild your credit score better. Make sure to repay the card on time and in full every month.

    Why Has My Score Gone Down?

    • Missing or late payments. The longer you don’t pay for a missed or late payment, the worse your credit score will become.
    • An account has become an arrear because you missed multiple payments on a debt. Once the lender has puts this in your report, it will negatively impact your credit score.
    • Large changes in your credit spending habits. Using too little or no credit tells lenders hardly any information about how you manage credit. Using too much of your credit could give the lender an idea that you cannot repay your credit. Keep a credit usage below 30% of your total credit limit.
    • You have taken out new credit. The lender does a hard search which is put on your report and they might prefer seeing older accounts. Both can negatively impact your credit score.
    • Court judgements such as filing for bankruptcy. Declaring yourself bankrupt informs lenders that you did not repay debts before.
    • Moving house a lot could be seen as you not having a stable position.
    • Closing an old account could reduce the average age of your account. It could also mean you have less available credit.

    How Long Does It Take to Improve Your Score?

    Information about your new bank account and credit card can take several weeks to show on your credit report. New accounts might take a few months until they can help with your credit score.

    Regular and on-time payments will help to improve your credit score and help build your credit history. Missed payments and court judgements remain in your credit report for six years. After six years, this information will be deleted.

    You can contact us, Consumer Debt Help. We offer solutions and insights to help with decisions regarding your debt.

    You can download our free E-Book here, which offers 10 simple tips on how to quickly get out of debts.

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