Does getting refused a mortgage or being offered high-interest rates on your short term loans sound familiar? These problems probably have to do with your credit score. Quick Loans Express explores ways of how to improve credit score in 8 ways.
How to Improve your Credit Score and Why?
How to Improve Your Credit Score and Why?
Lenders are put off by bad credit scores as a bad credit score equals a risky borrower. It may therefore take longer for you to find a lender to lend money to you. You also may find that you are getting easy fast loans offered with high interest only. Ways how to improve credit score will in no doubt bring the cost of borrowing down for you.
Why Do I Have a Bad Credit Score?
There are a few reasons why you may have a bad credit score. It usually occurs if you have not made repayments on time or have defaulted on your previous pay day loans or credit cards. Having a lack of borrowing history does not give you a bad credit score, but it doesn’t mean you have a good one either!
|Excellent||750 and above|
|Good||700 – 749|
|Fair||650 – 699|
|Poor||550 – 649|
|Bad||550 – Below|
How Can I Improve My Credit Score?
Quick Loans Express give you 8 ideas to improve your credit score so you can start borrowing cheaply again!
Get a Copy of your Credit Report
- Check your current credit score with the credit reference agency you are using
- Report any mistakes to the credit reference agency
- Ensure settled & payments accounts are listed
- Ensure you are on the electoral roll, not being on the register delays applications and you risk getting right out refused
- And, it is registered with the correct address
- Think about your ‘credit utilisation.’
- Use less than the 30% credit card limit
Limit Credit Applications
- Credit Reference Agencies record your searches
- Too many applications will raise a red flag with lenders
- Set up direct debits
- Schedule your direct debits for your payday or soon after
- Repay as much as possible over the minimum payment on credit card
- Keep a list of your routine payments on your mobile phone; either as a reminder or an alert.
- Take out loans direct – making the repayments on time can help your score
- Alternatively, ‘bad credit’ or ‘credit builder’ credit cards also can help
- Make sure to check if you can afford the interest rates on the amount you are borrowing before taking out a loan
- Never take out payday loans, credit cards and other means of credit if you will not be able to make repayments
- Defaulting or late payments affect your credit score
If You’re a Tenant, Get Credit on the Lease
- Rent payments can now be listed on your Credit Report
- Council / social tenants must ask about the Rent Exchange Scheme
- Private tenants ought to approach their landlord
Consolidate your Credit Available
- Cancel unused credit cards
- Consolidate your borrowing to one card only
- Pay off the high-interest cards first
Is There Anything I Should Look Out for When Borrowing?
Finally, do not be tempted by credit repair companies that market online and claim they can boost your credit rating. They can not do anything you can not do yourself. Save your cash and take the steps we have outlined previously to raise your credit score and chances of lenders allowing you borrow cheaply.
How to Improve Credit Score Conclusion:
In conclusion, having a bad score can really affect your chances of direct lenders and brokers accepting you for a loan. It also may cause lenders to offer very high interest loan rates that can lead to further decrease in your credit score. The FCA enforces regulations and can not accept people who cannot afford the repayments. Furthermore, credit scores are not static and can be changed for your benefit. Quick Loans Express have provided 8 useful tips of how to improve credit score and increase your chances of being accepted for a loan including high acceptance homeowner loans. Remember, only take a loan if you can afford to borrow and make the repayments. Failure to repay on time will only make your credit score worse!