This is a script of a lovemoney.com video. Instead of reading it, why not watch the video instead? You can find the video here.
I'm Jane Baker for lovemoney.com. Today I'm going to be looking at how to improve your credit score.
If you need credit, then you know it really helps to get a good deal if you have a decent credit score. Each lender will rate you differently, but here are a few ways you can improve your chances.
Six ways to improve your credit score
First of all, get a credit report to see how high your credit score is. You can get a free credit report from Experian at lovemoney.com/creditreport
If you feel it doesn't accurately reflect your financial behaviour, you can add a Notice of Correction. This can be used to explain extenuating circumstances, such as missing payments due to ill health.
Secondly, if you're not on the electoral roll at your current address, get on it now. Lenders check it to make sure you are who you say you are. If they can't find you, it often leads to an automatic decline for credit.
Don't go mad
Thirdly, don't go mad applying for credit all over the place. Lenders will take a dim view of borrowers who have applied for credit more than twice in the last six months. If you're rejected, check your credit report again to try to identify why.
Clearly, you want to show a prospective lender you can manage the credit you already have. So do make sure you pay your credit card, any loans and your mortgage on time. Missed payments and defaults will keep your score low.
Close empty credit accounts
You should also close any empty credit accounts you don't use anymore. If you have too much credit available to you in total, a lender may be wary of handing over more.
Finally, if you have ever held a credit account jointly with another person, this creates a 'financial association'. If you're no longer connected be sure to notify a credit reference agency. That way your credit score won't be affected if they manage their finances badly in the future.
That's it from me today. Thanks for watching Make Your Money Go Further, and see you next time.
This is a script of a lovemoney.com video. Instead of reading it, why not watch the video instead? You can find the video here.