Your credit score is a number that describes how likely you are to repay a loan. Lenders will use this number to see what shape you are in borrow from them. The higher the number the more likely they are to grant you credit. So in this case, the bigger the better!

 

Why it matters:

 

It’s important to take care of your credit score as it can literally cost you, a lot! Having bad credit can be a pain because lenders see it as being similar to you getting an ‘F’ in an exam and they will use this to charge you higher interest rates meaning you will pay more :(.

 

How to improve it:

 

Find a family member with good credit and ride the wave

You never have to use their card, but once authorised on the account all of their payment history will be replicated in your credit report even if you never use their card,  giving you a quick win. (note, make sure they are paying on time and keeping their balances low as negative marks will also affect you)

 

Make a 5 minute phone call and Increase your credit limits

 

This is not for you to indulge in more retail therapy, but to improve a key aspect of you score, your debt ratio. To put it simply it compares your total credit debt in relation to how much you have  available. If you spend the same amount as usual with a higher credit limit, your score will be boosted.

 

Ask your landlord to report you!

Before you panic this is going to help you, promise. With a little charm your landlord can officially report all of your rental payments via the ‘Rental Exchange Scheme’. By sending these results to credit reference agencies your score can be given a healthy boost. Just make sure that you have been paying on time!

Make your rent boost your credit file guide

Mix things up a little

Like your partner credit bureaus like to see you mix things up a little bit. By this we mean that a proportion of your credit score is ranked by how diverse the different types of credit you have are. Examples include:

Revolving accounts (i.e. credit cards, store cards…)

Installment accounts (i.e. home equity line of credit, auto loans)

Open accounts (i.e. some utilities accounts)

Be vigilant!

 

Look out for mistakes that can be easily fixed to boost your score and get on the phone to them ASAP. This is very easy to do and can be corrected quite quickly!

 

Side note:

 

Before we go our last piece of advice.  See if any companies giving you a negative mark on your score are willing to forgive you and make an amendment. This can be a long shot, however some companies can actually be quite forgiving and willing to work out a reasonable compromise with you. Because at the end of the day they’re people too and have a credit score that also affects them.

 

Once you’ve improved your score the key thing is to do no harm! Don’t wreck all of your hard work before applying for anything. The next step for you is to check out if it makes sense to refinance your existing loans. Chances are you could save money on a cheaper interest rate.

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