Could your credit rating do with a little boost? These days, a good credit rating is crucial for practically everything in life. You need one to get a mortgage, or even just to rent a property. It is also a requirement of some jobs to have a good score and it impacts how much credit you’ll have available to you.
If you don’t have a good score, don’t worry. There are ways you can improve it and below we’ll look at just 5 of them.
1. Check the basics
Sometimes improving your credit score can be as simple as ensuring the basics are correct. Many people find once they actually look over their credit report, there are errors such as wrong addresses or incorrect credit amounts.
By changing these basic details, it can increase your score and ensure you aren’t being penalised for anything that isn’t yours. For example, did you know that your ex-partner could still be linked to your credit report? Their spending habits could potentially be impacting your own score if they are still linked to you. So, checking and fixing any errors is important to improve your score.
2. Pay off existing debts
If you already have debts, you’ll want to try and pay them off as quickly as possible. The best way to do this is to utilise the snowball debt method. This means paying off the smaller debts first.
After paying off the smallest debt, use the money you would have paid into it, to the next smallest debt. Focus on paying that off, before moving to the next biggest debt you have. With this method you’ll continually see progress, which boosts your motivation to continue.
3. Ensure you don’t miss any payments
It’s important not to miss any payments if you want to improve your score. Even if you are having difficulties paying, it is better to contact the companies and they will arrange something to ensure your credit rating doesn’t take a hit. When you miss a payment, it can stay on your credit report for an average of six to 12 months.
4. Maintain low credit utilisation
Finally, you’ll want to maintain a low credit utilisation. Even if you have £5,000 in credit available, use as little of it as possible. This is because the higher the amount you’re using, the less financially stable you’re viewed as.
If you already have high credit utilisation, you may struggle to get additional finance too. Keep in mind even with a poor rating you can still get bad credit business loans. Just be sure to do your research to choose a reliable lender.
These are the 4 best ways to improve your credit rating. Remember, the better your rating, the easier you’ll find it to get good credit when you need it.