How can I easily improve my credit score?

Throughout life, your credit score will be massively important when applying for any financial agreements including car finance, mortgages and credit cards. Your score is a good indicator on how you manage your finances. If your score is low, it’s usually down to lack of credit or being unable to make repayments on time. If you are applying for something like bad credit car finance, how can you improve your chances of getting approved?

1. Get yourself on the electoral roll.

One of the easiest ways to improve your credit score is to register yourself on the electoral roll. It lets loan companies know you are who you say you are and verifies where you live. Lenders also look for how long you live at a property as they tend to favour people who are more settle and don’t move around a lot.

2. Make repayments on time

It may sound pretty simple but making all your payments on time is crucial to a good credit score. Even if you’ve had trouble in the past it’s important to start building your credit reputation up now. Setting up automatic direct debits or notifications of due payments is a great way to keep track of your money.

3. Check your credit file

It’s important to check your credit file yourself to see if there’s any mistakes. Even something simple as a wrong address can harm your credit score. Also, if you’ve ever took out joint finance with someone else, their credit score can affect yours too. In some cases, it can strengthen your application however, if their credit is bad, it can drag yours down too. Make sure you check your credit file to make sure it’s all up to date.

4. Don’t make lots of applications

The more searches or applications you make in a short amount of time can affect your credit score. Some companies let you check your credit score using a ‘soft search’ without any harm to your credit file. Using something like an online car finance calculator means you can check what car loan you might be offered before you even apply, without harming your credit score!

5. Close any unused accounts

If you’ve got any old accounts that you don’t use anymore, it’s a good idea to close them. It looks to lenders like you have a lot of open accounts and affects your ‘available credit’ when applying, they may think you can’t handle anymore credit.

6. Build your credit with a credit card

Although many people think that getting a credit card can be bad for your credit rating but a credit building card does the opposite! Making a couple of purchases on your credit card each month and showing that you can easily pay it back each month on time is a great way to prove to lenders that you’re good at keeping on top of your finances.

You’re credit score is always changing due to the way you manage your finances, you should make an effort to check your credit report every 6-12months just to make sure everything looks right! If you’re rebuilding your credit score it can take a little while for the improvements to show so don’t get stressed out if there isn’t an instant change.

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