Credit ratings or credit scores have been at the center of discussions lately, mainly due to the extensive media coverage of payday loans. The media has often cast a negative light on these loans, leading to general skepticism about personal credit scores. However, it’s essential to understand that your credit score isn’t the ultimate determinant for loan approvals, although it significantly impacts the decision. The good news is, you have the power to manage and turn a negatively impacted credit score into a favorable one.
Here are five ways to give your credit score a boost:
1. Regular Updates
Keeping track of your credit score is vital as it changes over time. Continually monitoring allows you to make necessary amendments before difficulties arise. Credit Expert offers a free online credit report and score monitoring service. Part of this free tool includes email and text alerts for any changes to your credit score. Considering this tool is free, failing to utilize it might seem unwise.
2. Verify Personal Information
Your credit report includes your electorate roll information like your current address, along with your financial history. If you’ve recently relocated, ensure that your address is updated on the electoral roll. Additionally, if you’ve lived with someone with poor credit, this could negatively impact your rating if you do not update the electoral roll.
3. Use Credit Cards
If you have no credit history but aim to secure a mortgage as a first-time buyer, consider getting a credit card six months prior. Be sure to pay the full balance monthly to evade interest charges. This demonstrates to banks and credit checking companies your ability to responsibly manage credit. However, refrain from this if your credit score is already low.
4. Consolidate
Consider consolidating your loans if possible. For instance, if you possess store cards with high-interest rates, you could procure a loan at a lower interest rate to pay off the store cards. This sanction allows you to manage interest payments and repay the loan effectively. But, if your credit rating is remarkably low, obtaining a new loan might be difficult. Remortgaging and using your home as collateral is an alternative but should be your last resort.
5. Provide Extra Information
Due to unfortunate circumstances like redundancy, divorce, or ID theft, anyone might find themselves in financial trouble. You can append a note to your credit history notifying credit checking companies of your predicament, providing proof that you have regained stability and can repay credit without issues.
For a more in-depth understanding, check out this article from The Independent.
