Many people fear checking their credit score, but it is important to check your rating periodically and know that there are always steps that you can take to improve your score. Having a good credit rating is important as it allows you to get approved for loans and get favourable rates, which could be key in major life moments like buying a home or new car. So, how exactly can you go about improving your credit score?
Table of Contents
1. Prove Where You Live
First, a simple step is to prove where you live by getting on the electoral register. It is best if you have one address for a long time, so if you are a student then it might be best to simply stick with your parents’ address.
2. Build Credit History
It is also important to build your credit history over time as no credit history could negatively affect your score. You should have bills in your name and make sure that these are always paid on time (automated payments would be smart). If you are a student, your student loan does not count towards your rating but you could use loans which are for students with bad credit to rebuild your rating.
3. Check for Errors & Fraudulent Activity
One of the main reasons to check your rating from time to time is to make sure that it is accurate as errors and fraudulent activity can happen and both can negatively affect your score. You can use tools like Credit Karma and Clear Score to have a look at what is currently on your report.
4. Use a Credit Card
A credit card can be a great way to build credit, but you must be wary and know how to use it intelligently. Using it often but for small amounts and always making repayments in full is smart and will help you to rebuild your score over time.
5. Avoid Multiple Applications
Applying for credit results in a “hard search” on your credit report and making too many applications in a short space of time can harm your score. This is why it is best to check your rating periodically and to always take steps to improve your credit score well in advance of making an application so that you will get approved.
These are the most effective ways to build your credit rating and combining them together will deliver significant results. It is important to note that it can take time, though, so you should always take action to improve your score well in advance of making an application for any kind of credit. Improving your rating will increase the chance of getting approved as well as allow you access to better rates, so it is always worthwhile improving your score.