There’s never been more of a need to look after your credit score. Years ago, banks made “common sense” lending decisions based on your wage slips, and you bank manager interviewing you.
Nowadays, and with computers making most of the decisions, if you want to get a mortgage, credit card or loan from the bank then you need to have a healthy credit score. Here are 4 ways to get yours into tip-top shape.
Electoral Register: One of the easiest and quickest ways of getting more points is by making sure you are on the voting register. If you’re not on, apply now through the local authority.
Pay Your Bills: If you pay your bills on time this will help your credit score. Miss a payment and you will drop points and this mark will stay on your credit report for up to six years.
Credit Card Balance: If you have a credit card make sure you keep your balance low in relation to your credit limit – under 50% if you can - otherwise your credit score will suffer because a high debt to credit ratio indicates to companies that you struggle to manage your money.
Limit New Credit Accounts: If you're going to apply for a mortgage or new credit account make sure you haven't opened any other credit accounts in the six months leading up to your application as it gives off bad signals about your financial situation.
If you've been declared bankrupt, have a CCJ or have been in an IVA, your credit score will suffer for six years. Unfortunately you'll just have to ride it out, but once this time passes it will disappear from your record and your score should go back to normal eventually – as long as you keep up your payments, and limit new applications.
Increasing your credit score takes time but the rewards are worth it in the end.