With a higher credit score you’ve got more chance of being accepted for credit, at the best rates. So a high credit rating can mean you’ll get a better deal on a credit card, a lower rate on a loan, and pay less interest on your mortgage – meaning it can save you money.
1. PROVE WHERE YOU LIVE
Lenders will check your name and address to prove that you live where you say you do. You can do this even if you are still living at home with parents, or sharing student accommodation. This makes it easier for banks and financial institutions to confirm your identity.
2. START TO BUILD A HISTORY
Having accounts such as a bank account could really help. Initially, taking out a new account might see your score reduce a little, but managing it well should help to improve your Credit Score whilst building your credit history. A bank account with an overdraft facility is a form of credit and can show that you can keep within its spending limits.
3. CONSIDER CLOSING UNUSED ACCOUNTS
Consider closing unused credit accounts if you no longer require them. Lenders can take into account the credit limits available to you, not just what you currently owe. It could be better to have fewer, well-managed accounts, and long-standing accounts with good histories.
4. SPACE OUT CREDIT APPLICATIONS
Applying for lots of credit can suggest you are over reliant on credit to supplement your income. If you can, aim for no more than one application for credit in a three month period – this could be applying for a credit card, debit card, mortgage…even a car finance deal.
5. AIM TO HAVE A GOOD AMOUNT OF AVAILABLE CREDIT
Your ‘available credit’ is the difference between your outstanding balance and your credit limit. If you have low available credit, or a large number of your accounts are using above 50% of your available credit, banks and financial institutions may think you’re struggling to manage your finances.
6. TRY TO AVOID DELINQUENT AND DEFAULTED ACCOUNTS
Accounts become delinquent when you’re late on payment. Accounts are defaulted when the borrower fails to repay the loan as scheduled in the initial agreement. Defaulted accounts will remain on your credit report for five years.
7. TRY TO AVOID OR RESOLVE COURT JUDGEMENTS, SIO’S, NAP'S OR BANKRUPTCY
All of these items will have a negative effect on your Credit Score for five years from the date the entry was recorded. These records should not appear on your credit report after five years as long as they have been settled/discharged.
8. PROTECT YOUR IDENTITY
Look out for unfamiliar or suspicious entries in your report, such as an account you didn't open, a sudden surge in the amount you owe or new credit applications you didn't make - they could mean you're a victim of identity fraud.