How to improve your credit score

Credit scores are a reflection of what’s on your credit report and take into account your past and present actions. Not only that but it can also affect your ability to be accepted for a mortgage, personal loan or other form of credit. Here are some simple tips you can follow to help improve your score:

Pay on time

Missing a payment by even a day or two could have a significant impact on your credit score. Lenders don’t like to see late payments as it might suggest that you can’t successfully manage your current finances and may be unlikely to cope if they were to lend more to you. It’s a good idea to pay all your credit agreements and utility bills on time and in full and if you have any outstanding payments, be sure to try and pay them off first.

Close unused accounts

Close any unused or idle accounts that you may have as they may be charging you unnecessary fees and can often be targets for identity thieves. Also, lenders may look at old accounts as amounts of credit which are still available to you so just because you’ve forgotten them, it doesn’t mean they’re not affecting your ability to get new deals. Checking your credit report will help to identify any accounts you may have forgotten about. However, be careful not to close the oldest accounts in your report as it will shorten your credit history and may lower your credit score.

Get on the electoral roll

Your presence on the electoral roll provides valuable proof of your address to lenders. It shows lenders that you live where you say you do and how long you’ve been there. Remember, part of being approved for credit is about ensuring the lender is confident you’re going to pay them back and a stable living arrangement helps with that. However this information won’t show up on your credit report immediately after registering so to make absolutely sure potential lenders know you are registered. You can register at www.aboutmyvote.co.uk

Stick to the rule of thumb

A general rule of thumb is to keep card balances under 25% of your available credit. A high credit utilisation will imply you have more debt than you can handle. A low utilisation could help improve your credit score and indicate that you are a minimal risk to lenders.

Watch out for identity thieves

Identity theft can be potentially detrimental to your credit score. Monitor your credit report for any unusual or suspicious activity such as new accounts opening in your name as it can be an early indicator of identity theft.

Cut old financial links

If you’ve ever opened a joint mortgage or bank account with an ex-partner you may still be financially linked with them which could affect your score. To financially disassociate yourself from them and remove any links on your Noddle credit report you will need to raise a dispute against the relevant information on your credit report.