5 tips which could improve your credit score
Having a good credit score can have a huge impact on your chances of being approved for a mortgage. A good credit score can help you secure the most competitive interest rate by passing the lenders internal credit score.
Your credit file should be as clean and accurate as possible to help improve your chances of securing a mortgage. Your credit score shows how you’ve managed money in the past, and it’s based on things like your debts, store cards, bill payments and car loans.
Here are a few simple tips to help improve your credit score:
- Make payments on time:
This demonstrates that you can use credit and pay it back responsibly. Using credit little and often can be a good way to increase your score, showing you aren’t reliant on credit and pay it back as soon as possible.
- Keep credit utilisation low:
This is the percentage of your credit limit that you use regularly. For example, if you have a credit card limit of £2,000 and only use £500 of balance, this shows you are using below 50% of the available balance and aren’t reliant on the full amount available. However this can actually be a double-edged sword if you have lots of credit cards you don’t use, as lenders could be nervous you have too much available credit ‘on-tap’, so cancel credit cards that you don’t think you’re likely to need.
- Register to vote:
Make sure you register for the electoral roll. Registering to vote improves your credit score. This data helps lenders confirm your name and address, so your score will increase as a result.
- Keep your addresses up to date:
Keeping your address updated is very important. Your address along with other information allow lenders to identify you and link you with your financial behaviour. With so many accounts being managed online it’s easy to forget to update your address, but leaving accounts at old addresses can cause issues with credit, not to mention someone else might be picking up your post!
- Check your credit report for errors:
Mistakes such as incorrect spelling of name, date of birth or address can cause your credit score to drop. If you notice any incorrect information or fraudulent activity, contact the provider to rectify this immediately. There are a number of ways to access your credit report for free, one we like is the MSE Credit Club, which also sends you a monthly reminder to check your report and highlights any changes.
Undray Griffith – 9th June 2022