Whether you’re applying for an auto loan, mortgage or you’re hoping to avail a mobile phone contract, there’s no denying the fact that your credit score is a major consideration for your approval. Consumers with bad credit scores under their belt often struggle to get approved for these financial products because of their low creditworthiness. To address the problem, there’s really just one solution. Boost your credit rating and you’ll have better chances of snatching great deals at a more affordable cost.
To help you improve your credit rating, here are quick and easy ways to do it:
Check your credit files
Ideally, you need to check your credit files annually. You can do it for free too from popular credit file providers online. When checking your files, the goal is to look for errors, inaccuracies and discrepancies. One error can wreak havoc on your credit rating. It’s important to check your files so you can report any errors if there are any.
Register to vote if you haven’t done it yet
You are less likely to get any credit unless you are a registered voter. You can register online through UK’s electoral roll website. Doing so will take a few minutes to complete where you’ll just need to answer a few questions and fill out a form.
Always pay your bills on time
One of the biggest factors that affect your credit score is your payment history. It constitutes 35% of your credit rating. If you want to effectively boost your score in the shortest amount of time, you can do by making sure that your bills are always paid on time. These bills include utility bills, mortgages, credit cards and more. Setting up automatic debit payments may help for some of your accounts.
Limit your credit applications
Every time you apply for credit, your lender injuries about your credit files. This inquiry is a hit on your credit rating. The more hits you have in a short span of time, the more suspicious credit agencies may become. Adjust your applications accordingly or use eligibility tools before applying.
Apply for a secured credit card
If you’re just building your credit score, applying for a secured credit card can help. This will help build your credit history. If you make sure that your payments are always online, that will help credit agencies to predict your behavior as consumer. Since you have bad credit, expect that the APR for these cards can be pretty steep. Repaying your bill in full each month is really imperative.
Keep credit card charges below 30% of your credit limit
One of the easiest tricks that always work when boosting your credit score fast is to keep your credit card spending at minimum. Ideally, you should keep your credit card charges before the credit limit. This way, credit agencies will see that you’re not overusing or overcharging your cards. This means that you’re in a good financial situation and lenders always see that as something positive.
Pay your debts
Aside from your payment history, another major factor that affects your credit rating is the amount of debt you owe. Whether it’s an auto loan, mortgage or a personal loan, the goal is to lower the total amount of debt you owe. Some financial experts suggest you use your savings if you have any, to reduce your debt. This is not always applicable for everyone however. If you do go this route, make sure you seek for financial expert advice if necessary. In any case, pay your debt as that can significantly improve your credit score.