Top ways to improve your credit score
Whether you’ve got bad credit, little history, or want to build on an already-good rating, all of these steps can help increase your credit score.
Make sure you’re on the open register. The electoral roll is used by agencies as proof of your residence. By appearing on the open register, you make yourself publicly traceable at your address, which lenders will find reassuring.
Pay your bills on time. Direct debits that constantly bounce will paint a bad picture of your finances, and suggest you’re unpredictable or unreliable. When all your bills get paid on time, you start building a portrait of yourself as a responsible lender.
Increase your overdraft. An overdraft is counted as credit by the CRAs. Even if you don’t use it, having it available to you helps show you’re sensible with you’re spending and don’t splurge just because you can.
Consolidate your records and accounts. The clearer a picture the CRAs can get of you, the better your score is likely to be. Having things like your banking, mobile phone contracts and drivers licence registered at different addresses can cause confusion and makes you look suspicious in the eyes of lenders. Even if you move around a lot, it’s important to keep all your records up to date.
Take out a credit card (and keep up with the repayments). To see that you’re responsible with credit, you need to have the opportunity to use it in the first place. By having a credit card which you use carefully and responsibly, you start building a picture of who you are, and you spend.
Reduce your debts. While having some credit on record is a good idea and will help build out your history, you should keep any debts under control, and paying these off will help prove you’re responsible when lent to. This is particularly important for any debts you have that are overdue.
Note: The total amount of debt you have may not be factored into your credit score, but it will be looked at by lenders to see whether it’s feasible for you to build their payments into your budget. If you already have too much other debt to be focusing on, they may see you as too much of a risk.
Check your file is accurate. A lot of the information the CRAs hold on you is compiled automatically. It’s easy for them to confuse details and records, and something as simple as an incorrect house number could be harming your rating. Request a report from all three agencies and if there’s any incorrect details, demand to have them amended.
Limit the number of credit applications you make. Applying for credit all the time can be seen as something of a red flag, especially if you’re often turned down. By being careful and selective with your applications, you’ll come across as someone who doesn’t ‘rely’ on credit day-to-day, but uses it occasionally for sensible purchases or borrowing.
How can I raise my credit score in 30 days?
If you’re wondering how to improve your credit score fast, there are a few things you can do. While they will make a small difference, you shouldn’t expect to transform your credit score in just a month. In the short term, the best options from the above would be joining the open register, consolidating all your details at one property, and applying for a credit card – but only if it looks highly likely you’ll be eligible for one.
With sensible use of credit and by keeping all your details up to date, there’s no reason why your score won’t improve over time. If you’ve managed to secure your mortgage agreement in principle, you’ll also want to appoint a conveyancer while you continue your property search. They take care of all the legal aspects of your property purchase, and you’ll want them ready to help as soon as you make an offer. For more advice on the process that lies ahead, take a look at our first-time buyers guide. Alternatively, get a quote for your conveyancing today.