Your credit score is your gateway to financial opportunities – the higher it climbs, the better your chances of securing loans, credit cards, mortgages, and contracts at favorable rates.
23% of the UK have been denied credit due to poor credit scores, so don’t worry - you’re not alone in wondering ‘How do I improve my credit score?’.
Lenders consider various factors in their decisions. Let’s dive into some of the ways that you can influence and improve your credit score.
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Register to vote
Surprisingly, getting on the electoral roll can give your credit rating a boost. It validates your identity and address, making lenders more inclined to approve your applications.
Build your credit history
It’s not only poor credit history that hampers your score; having no history can be just as detrimental, especially for people new to the UK and young adults. Establishing a credit history through avenues like bank accounts and utility bills is key to proving your financial responsibility.
Mind your applications
Avoid the temptation to regularly apply for credit products. Multiple applications in a short timeframe signal reliance on borrowing credit, lowering your score. Opt for a strategic approach – apply for one product every 6 months and utilize online eligibility checkers to gauge your chances of being accepted for a credit product.
Timely payments
Consistent, full payments demonstrate reliability to lenders, paving the way for better terms and limits. Conversely, late or missed payments can damage your score, potentially leading to account closures or defaults.
Credit utilization
Maxing out your credit isn't advisable; aim to utilize no more than 25% of your credit limits to maintain a healthy score. Having lots of available credit that you don't use can also affect your rating negatively.
To summarise
Building and maintaining a good credit score is about showcasing your trustworthiness as a borrower. With BuildMyCreditScore, you're equipped to take charge of your financial journey and elevate your creditworthiness with every purchase. Let’s unlock your credit potential together!