There’s no magic wand to instantly improve your credit score. But there are some simple and effective things you can do to help your score head in the right direction. And this is without necessarily having to take a credit card out. Below we outline the common things you can do and the not so well known ones too.
1. Don’t take cash out with a credit card
Just because you can, doesn’t mean you should, Lenders are looking to see you can pay the money back you owe. Taking money out with your credit card will be noted on your credit reports and may raise questions over your ability to live within your means and some lenders may see it as a sign of poor money management.
2. Get on the electoral roll
One of the quick and simple things you can do to help boost your score is to simply make sure you’re registered to vote. Once you register to vote your details are recorded in your report. This means lenders and confirm your name and address. If you move on a regular basis, don’t forget to make sure you’re registered to vote at your new property.
3. Look for errors on your report and correct them
If you don’t check your credit report on a regular basis then you won’t know if there are any errors or the chances of you getting approved for any financial products you apply for. There could be small errors like a previous address not being right or a payment being recorded incorrectly. They all add up and affect your score and your ability to get credit.
If you do spot something, make sure you contact your CRA (credit referencing agency). They are supposed to respond within 28 days with any disputes.
4. Make Your Rent Count
Until a few years ago your rent didn’t count towards your credit score. Now thanks to companies like ours you can track your rent and improve your credit score. There are different subscription levels available and you can select the one that best suits you.
5. Think about a credit builder card
These are really aimed at those with poor or low credit scores. To help you build up your credit history, By using the card to spend on small amounts e.g shopping and repaying on time and in full every month you can show you are a responsible and know how to manage money. But note they usually have high interest rates and low limits - deliberately to help encourage sensible credit usage.
6. Pay More - If you can
By paying more than the minimum amount you are showing lenders that you won’t struggle to meet repayments. And by paying more you’re also clearing your debts faster too! Win-Win!
7. Aim for low Credit utilisation
Credit utilisation is the percentage of your total available credit that you are currently using. For example, if you have a credit limit of £1,000 on a credit card, and you spend £500 during the month, you will have used 50% of the £1,000 available to you. This means your credit utilisation ratio would be 50%. Most CRA’s (credit Referencing Agencies)would say a credit utilisation rate of 30% is a strategy to go for. Anything over 75% is likely to cause red flags! You can see how much credit you’ve used in your Canopy account.
8. Pay the bills on time
Making sure you don’t miss payments is a fundamental part of building your credit score and history. After all, being able to show that you can repay your bills on time and stay within any limits you’ve been given is what a credit score is all about.
Missed payments can have a negative impact on your credit score. So if you’re struggling with repayments it’s important to contact and discuss this with your lender.
9. Avoid too many applications
If you’ve been rejected or declined for an application then don’t keep applying. As the number of times you have applied shows up in your account. Making too many credit applications in a short space of time, may make lenders think you're desperate for credit.
So wait a while and apply again. While waiting check your credit report to make sure there are no glaring problems!
10. Check for fraudulent activity
Fraud is on the rise - we’ve seen that first hand with our referencing service. So be wary of fraudsters. They could use your personal information and details to take out credit in your name without you realising. So check your report, if you see something a-miss, contact your CRA’s specialist fraud team.