It is fair to say that more people today are now more aware of their credit rating than at any time in the past. With one in four British adults having what is to be considered to be an ‘adverse’ rating, banks and lenders of all stripes are now combing through people’s ratings with a fine comb when it comes to deciding to issue credit cards or loans. Never fear however, as there are a few simple rules and tips you can follow which will help.

Make sure you are on the electoral register

One of the very first checks carried out on any applicant is to see whether they are listed on the electoral register. Registering is simple enough; all it takes is to contact the local council to update the roll with your details.

Associate with the right people

Your credit score can be affected by those in close proximity to you, but only if you have joint financial dealings with them. Joint accounts, loans or credit cards can affect your credit rating, especially if you partner has a low rating, which will inevitably drag your rating down at few notches at the same time. If you ever part ways with the individual you had a shared financial stake with, be they a spouse or business partner, ask for a ‘notice of disassociation’ from the credit rating agencies so their credit score is no longer a factor when it comes to yours.

Don’t ignore defaults

Any defaults that you think were unjust at the time can be appealed against by asking the company who filed the default to remove it. If things don’t go the way you intended down this avenue, then take your complaint to the Financial Ombudsman.

Apply for credit one at a time

Trying to find a source of credit fast by applying to several credit lenders at the same time will damage your credit rating. Every time you apply for credit it goes on your credit report, rejections lower the score, so many rejections in quick succession will snowball into a large devaluation in your rating. It requires patience, but apply one at a time to preserve your score a good level.

Always look to build a credit record

A little known fact about credit is that you are much more likely to be rejected for credit for not having a credit history then for having a bad credit history. Lenders can see bad credit history and plan accordingly if they decide to take the applicant on, no credit history or very little history makes lenders more wary as they do not know what to expect. So it’s best to have a credit line and use it regularly but in a sensible way to build a high credit score, even if you don’t really need the credit line, you will need a strong credit rating at some point.

Stability leads to a soaring rating

Stability is one of the largest attractors for lenders when looking at a credit report. Working for the same company/being in a job for a long term shows steadiness that attracts lenders likes bees to honey. Other factors that can send your credit rating soaring are paying into a pension scheme, owning your own house and paying into insurance schemes etc.

Don’t miss a payment

With credit reports keeping data that spreads six years into the past, failing to meet repayments you committed to on a regular basis can soon stack up. Miss these payments as regularly as you pay them will mean your credit report makes terrible viewing, including dogging you for years after you missed them. The simplest way to avoid this is, of course, to meet your repayments as promised or at least the minimum repayments needed.

Repay your borrowings

Another of the arcane ways your score is calculated is by totalling the amount of all credit you currently owe to your lenders. It’s a balancing act essentially, too little credit and you won’t have enough of a report for ease lenders concerns, too much credit and they will have doubts about your ability to repay the credit. Reduce your total borrowing to a stable level with a downward trend spread over a handful of creditors to boost your credit score.

Your credit file should be regularly checked

Checking up on your credit score should be as normal as checkups at the dentist. Keeping on top of the information means no inaccurate information will harm your credit score and might lead to a boost every now and again. A fit and lean report will mean fewer rejections, which in turn will mean less damage to your credit score.

The measures we have outlined in this article are simple, cost effective ways that will boost your credit score. By boosting your credit score, you will be able to get larger and better quality credit, with lower interest rates, charges etc. So there’s no reason to delay, get that credit report in tip top shape!

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Categories : Credit