Learn how to improve your credit score

Your credit report is crucial when trying to get any kind of credit from a loan, mortgage, or even when you are signing up for a mobile phone contract. A low credit score may start to seem like an unyielding dead end when you first approach loan companies. Then, you find yourself struggling with the 21st century’s worst vicious cycle – a low credit score that beckons an even lower score. In a situation like this, you may find yourself knocking on the door of every Tom, Dick and Harry for finance advice. That is among the worst mistakes that someone with a low credit score can make. Use our guide against bad credit to save you from these mistakes and improve your credit score!

The Cornerstones of A High Credit Score

1. Prevent a bad credit report by spacing out your loan and finance requests. Each application you make creates a “credit search” on your report. Too many of these searches make lenders more reluctant about sanctioning credit because it makes you look overly eager about credit, or hints at identity fraud.

2. For the lenders’ benefit, ensure that you register your current address on your local electoral role, and update it every time you move. You can seek help from your local council to do this.

3. Just like bad credit calls for worse credit, good credit begets better credit. If you have mortgages, purchases on finance or credit cards, make regular, early payments. Sign up for direct deposit when you can. This gives trustworthiness to your credit record.

4. Think of CCJ’s as the bane of your credit existence and steer clear of them at any cost. If you are accosted with one, pay it off within a month, so as to reinstate a cleared status on your credit report.

5. Sever the strings that holding you back financially. If you have come out of a relationship, make sure you also terminate any financial association with your ex-partner. His or her bad credit reputation needn’t affect you anymore.

6. All credit agencies allow you a free credit report and access to your credit score at a nominal price. Check on this information periodically to keep yourself abreast with what lenders think of you – this is the best way to uplift your credit score.

7. While it may be tempting, avoid exploiting your credit allowances till the very last penny. Also, when your credit limit is increased, it doesn’t necessitate more purchases. Allow future lenders to see that gap between credit allotted and credit consumed – it boosts your credit score.

8. Most people don’t know that they are allowed to add “notices of correction” to their credit report. So, if you have delayed some payments due to extenuating circumstances such as forced unemployment or end of a marriage, you can inform potential lenders about that by making a note on your credit report. Of course, you wouldn’t know what notes to add if you don’t follow rule no. 6!

9. People commonly bounce from one credit card to another without officially closing their previous accounts. To help your credit score soar, make certain that you are only attached to accounts and cards that you actually use.

Resources to help keep a check on your credit score