Your credit score is very important. A higher credit rating means better chances of being accepted for credit at favourable rates. It can greatly affect your likelihood to get things like loans, credit cards, mortgages, mobile contracts and more.
Looking for tips on how to improve your credit score fast in the UK? This article will help you.
Factors Affecting Credit Score
First of all, let’s talk about the factors that can harm your credit score:
● Exceeding your credit limit
● A history of late or missed payments
● Having a joint account with someone with a poor credit rating
● Withdrawing cash using your credit card too often
● Frequently applying for credit
● County Court Judgements (CCJs), bankruptcy, or a home repossession
● Wrong information about income and residence
● Not being on the electoral register
Ways You Can Increase Your Credit Score Fast
Demonstrate Your Creditworthiness
If it’s your first time borrowing money, it’s hard for a lender to judge how reliable you are to meet your repayments. This influences your credit score.
A credit building credit card with a low limit or an arranged overdraft could be an option for you. Taking a small amount of credit can also help you with applying a larger amount in the future – provided you can manage it well.
Electoral Registration
Make sure to register to vote as lenders will use this to check your name, present and previous addresses.
Lenders are required to verify these facts to validate your identity before offering credit. Non-electoral registration may cause a delay or rejection of your credit/mortgage application.
Timely Repayment And Staying Within Limits
The main concern of any lender is to ensure that you are reliable for making regular repayments. Any missed payment, especially in the last 12 months, negatively impacts your credit score.
Also, spending over your credit limit regularly implies that you have a hard time managing your finances. So, it’s better to stay within your limits.
Check Credit Report
Check your credit report regularly for any errors and mistakes and report them.
Avoid Multiple Applications
Multiple applications could demonstrate to lenders that a person is struggling to meet expenses. It’s wise to apply for a ‘quotation search’ instead of a ‘credit application search in case you just want to compare rates.
Be Aware Of Joint Accounts
Applying for joint credit with someone, such as a joint loan, joint mortgage or an overdraft your credit history will be linked to theirs.
If you are looking to improve your credit score, you should ask your partner to try following the same tips to improve their credit score too. Otherwise, their poor credit report will impact your score too.
How Long Does It Take To Improve Your Credit Score?
Improving your credit score can take some time, ranging from a couple of weeks for updated information to appear on your credit report to a few months before new accounts start to help improve your credit score.
In short, managing your finances more effectively can make a considerable improvement in your credit score at a much faster pace. A good credit score will help you if, or when, you want to apply for a home mortgage.
