Five ways to improve your credit score

Improving your credit score is a vital step in increasing the likelihood of obtaining a mortgage or loan. Paying bills on time is clearly essential in maintaining your score. Keeping your credit card balances low and not going over the spending limit at all times should also help.

Ensure you are on the electoral roll

Ensuring your name is on the electoral roll at your current address is a significant factor in your score. You can register even if you live with your parents or if you are in shared accommodation. You do not need to own your own home. This data allows lenders to confirm your name and address easily.

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Build up a solid credit history

A limited history can be almost as much of an issue as a poor history, classifying you as a risky borrower in a lender’s eyes. This makes it problematic for companies to assess you as an individual. If you are a young person with a first job, it can be a useful idea to take out a credit card and demonstrate responsible management by paying it off every month.

Make your payments on time to improve your score

Paying your bills on time and in full will demonstrate to lenders that you are a responsible borrower. It is important to note, however, that unused credit limits on cards can have a detrimental impact on your score as there is the risk that you may suddenly use them! In addition, using credit cards to fund essentials such as utility bills can have a negative effect on your score There may be occasions when you will prefer to take out a loan to pay for a purchase, rather than putting it on a credit card. You will be required to sign a loan agreement. This is a contract between a lender and a borrower that outlines a repayment schedule. If you require a private loan agreement, for example, with friends or family lending, it’s essential to seek the help of professionals. You can obtain loan agreement information from Parachute Law or similar firms.

Avoid moving too frequently

Staying in one town or city may not always be possible due to work or personal circumstances. Where possible, however, you need to demonstrate stability to lenders and frequent moves send the opposite message. This is another reason behind the value of appearing on the electoral roll.

Check for mistakes in your credit report and make amendments

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Minor issues, such as an error in your address, can affect your credit score. It’s worth getting a copy of your report to verify your information and make amendments if required. Your credit report will be the deciding factor in determining whether you receive credit and approval for a number of products on the market, such as a mortgage, a credit card, monthly payments for insurance, a bank loan or even a mobile phone contract.

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