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5 tricks to boost your credit rating

Emma Roberts
by Lovemoney Staff Emma Roberts on 26 September 2010  |  Comments 1 comment

Improving your credit rating doesn't have to be difficult. Here, Emma Roberts uncovers some easy ways you can improve your score today.

5 tricks to boost your credit rating

Understanding your credit report can be the key to financial success, but it’s amazing how many people still don’t know the basics when it comes to their credit record.

Well, armed with these 5 super-quick tips, you can be sure that your credit report is as good as it can be, leaving you to focus on the more interesting things in life.

Myths galore

The credit report has more myths surrounding it than an ancient Greek goddess, so it can be difficult to sift through all the fiction to get down to the raw facts.

Well , here at lovemoney, we think there’s nothing more annoying than money myths confusing the masses, so we made this video that tackles the most common myths surrounding credit ratings:

Having a good credit rating can be the key to financial success but with so many myths surrounding what affects your credit score, it can all get a bit confusing. Emma Roberts unveils the 5 biggest credit rating myths that could destroy your finances and how to beat them.

Now we’ve eliminated the myths, let’s get down to business. What exactly can you do to improve your credit rating?

1) Know your situation

OK, first things first, there’s no point trying to improve your credit record if you don’t actually know what it’s like. So, stop burying your head in the sand and look it up.

The UK’s largest credit reference agency, Experian, provide a credit monitoring and identity protection service. Sign up for a free, 30-day trial to have a nosey at your record, or pay £2 for a statutory report. You can also check your report via CallCredit and Experian.

You should also note that your report is not set in stone and changes over time, so make sure you check it on a regular basis.

2) Check for mistakes

Even the slightest mistake on your credit report could rock your financial world to its core, so it’s essential that you check it thoroughly for any errors.

You can contact a company with which you have credit, or have applied for credit with, to update the following:

  • If a credit account has been paid and is still showing as outstanding
  • If a company has searched your report more than once in relation to one application
  • If you have been linked to addresses with which you’re not connected
  • If you have separated from a partner and broken off your financial association

No one wants to be rejected for credit. Check out these six ways to make sure that doesn’t happen.

If you see information on your credit report that you don’t recognise, it’s possible that it relates to fraudulent activity.

The bogus information may include names you have never used, addresses to which you have no connection, or applications or loans which are not yours.

To investigate this, contact the credit reference agency which issued the report immediately.

3) Protect your identity

Identity fraud drains an enormous £1.7 billion a year from the UK economy, and yet can be very difficult to detect. Some victims of identity theft notice long after the event.

Regularly checking your credit report can alert you to fraudulent activity as it happens, meaning it’s easier to stop and easier for the relevant organisations to investigate. If you're really worried, it can be worth signing up for Protective Registration, which costs around £15 and stops any applications for credit going through without super-stringent identity checks. But don't bother with ID theft protection - here at lovemoney.com, we think this type of insurance is an expensive rip-off.

If you notice entries referring to transactions that you have not initiated, contact the companies involved immediately and they will help unravel events and if necessary notify the police.

4) Close unused accounts

You may think that paying off your credit cards in full and then not using them means they are dormant, and won’t affect your credit rating, but actually they do.

Lenders assess how much credit you already have access to. The more credit you have, the less they are likely to want to provide you with. So you should close all unused accounts to improve your rating.

5) Don’t get walked over

When you apply for any form of credit, the lender searches your report and leaves a record called a footprint.

Recent question on this topic

As these are visible to any other lenders searching your report, it’s best to limit the number of these footprints you allow to appear on your report.

Lenders may see a host of applications on your report as a sign that you are getting desperate, that you’re overstretching yourself, or that someone else is trying to defraud you.

You can specifically request a lender not to leave a footprint by asking for a quote rather than a complete application.

You can also ask them to remove records if they have accessed your records more than is absolutely necessary.

So there you are, follow these 5 quick tips and you’ll be on your way to a gleaming credit report in no time. Good luck!

Got any tips of your own?

Please share them using the comments box below!

More:What REALLY damages your credit rating| This blunder will ruin your credit rating|

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Comments (1)

  • ac2b
    Love rating 0
    ac2b said

    Many apologies to sound a bit harsh. I'm afraid the only thing that gleams in your article, Ms Roberts, is its utter superficiality.

    I am not in any way promoting EU interests by suggesting the following -only the interests of all consumers of this website who also use retail banking.

    Please read the following and then write an article on the fact that, for the banking retail market, there is no such thing as a bank anymore.

    http://ec.europa.eu/internal_market/bank/legislation/index_en.htm

    "Credit Institutions" have taken their place, with their different nature and targeted purpose.

    It is high time that UK consumers were made thoroughly aware of this important difference and not only the continued reminder that their 'credit report' is now in existence, with its blatant bias in creditmetrics.

    I ask you, Ms Roberts; on applying for a job, and assuming its NOT your first application and therefore you don’t have any work experience, would you expect your prospective employer to be satisfied with your record of performance only for the period of time that his company had been in existence? A ludicrous idea and very obviously not.

    So it appears to be, however, with each individual's credit report. Whilst it certainly details the start date of a credit agreement, the full history from account opening is not voluntarily shown. The net result is a fraudulent flaw in creditmetric reporting.

    What is this website's opinion on how to "clean up" that issue?

    Report on 28 September 2010  |  Love thisLove  0 loves

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