Your credit score is essentially your financial footprint. It affects your ability to apply for a mortgage in the future, as well as loan and credit card applications in your name. Essentially, to lenders, your credit score determines how reliable you are with your money and if you can be trusted to pay back any money lent out. You can check your credit score online for free and most entities that offer this service will let you know whether it is good or needs improving.
Does your credit score need improvement?
If you have had a look online and your credit score left you feeling a little bit low, you’re not alone! Having to assess how you manage your money now and again is no bad thing and there are countless people getting to grips with their finances after a questionable result. Some free credit rating checkers also provide a report, which is extremely helpful. It is often advised that any score under 649 needs a pick me up as soon as possible.
How can I increase my credit rating?
If you receive a low credit rating there are some top tips to help get your score creeping up.
- Pay your bills on time
- Check your details are up to date
- Register on the electoral roll
- Check for fraud
- Paying off existing debt
- Trying to remain in one fixed address
Credit cards for boosting scores
If you’re in debt, this may not be the solution for you. However, although it might seem like an alien thing to do, taking out a credit card can actually help increase your credit score. Some providers have specific cards designed to help those trying to improve their rating. This is particularly useful for those who have little in the way of credit history.
Essentially having a credit card and paying off the balance each month shows how trustworthy you are to lenders. This can open the door to other credit cards and loans in the future, allowing you to grow your credit score further. Be aware that the interest charged on these booster cards is often much higher than an average credit card – giving you an incentive to pay it off monthly and manage your money correctly.
When should I check my credit score?
Make sure that your credit score is not a last-minute thought before buying a car or securing a mortgage. The sooner you get to grips with the concept the better as some issues can take time to rectify. Never race against the clock to secure a loan or credit, pay attention to your credit rating sooner rather than later by using one of the many free online tools available.