Boosting Your Credit Rating
A healthy credit score is one of your most valuable assets when applying for credit, loans and mortgages. Lenders will check your credit score when you apply to borrow funds from them and make a judgement on whether you are a risk to lend to – essentially, it proves that you are responsible with money and likely to pay back when you owe when required.
So what can you do to ensure that your credit report remains squeaky clean?
Check your credit report
You can see your credit report by apply to view it with any of the three main credit agencies in the country: Experian, Trans Union, and Equifax or from Annual Credit Report.com. You can get a free copy once every 12 months.
Every time you expect to apply for credit, check over your credit report. It’s a good idea to check it every now and again just to make sure everything is in order.
When you have your credit report, be sure to check it carefully. If any information is wrong, or if previous lenders have made at least one glaring error, it could affect your rating. You’ll need to contact the credit agency in the case of a discrepancy, and they should be able to correct it in due course.
Also, make sure your address is correct and your old addresses are accurate – this is very important, especially if waiting for your report to come in the mail. Mistakes relating to your current and previous addresses could adversely affect your credit rating.
If you’ve lived at the same address for a number of years, you’ll be more attractive to lenders. Simply being on the electoral register boosts your credit rating too, as will having a fixed home phone number.
If you have any credit cards you don’t use, cancel them. Dormant credit cards don’t look too good on your credit report – agencies and lenders may find that if you have them, you’re not that responsible when lending money.
Applying for lots of credit all at once will show up on your credit report, and does not look good to other lenders. On the whole, having a credit card to help you out when you’re feeling the pinch can help you as long as you stick to the repayments each month.
Regarding using credit cards when sticking to a budget, set up a regular savings account and shop around to make sure you get the best rate.
Review your day-to-day spending to see if you can make any cuts to increase your savings, then set up a budget for essentials and stick to it.
Don’t ever miss your payments
Missing repayments on credit cards and loans even by a few days can negatively affect your credit score, and the missed payments will show up on your credit report for the next six years.