Whether you’re looking for a mortgage or want to get a car on finance, you need a good credit score. Many loan providers rely on a good score to determine your reliability, so it’s worth taking a closer look at your credit rating.
For those struggling to get credit of any kind, it might be because you have a limited credit history. For example, if you’ve never taken out a phone contract, car finance or anything similar, you might be deemed unreliable in the eyes of a lender.
Another reason you might be struggling to get credit is due to erratic or missing repayments. Credit lenders like to see consistent repayments, on time and in full. So, if your history is all over the place, that could explain your poor credit score.
The good news is there are things you can do to boost your credit score, and some are very straightforward fixes. It’s easy to feel overwhelmed when assessing your credit rating, which is where Drafty comes in. This blog details ways you can boost your credit score and prove yourself as a responsible borrower – helping you build a bright future.
1. Make sure you’re on the electoral register
Getting on the electoral register helps lenders check your credit rating. It shows your full name and address, as well as demonstrates that you’re a legitimate person living in your community.
2. Check your credit history files
Mistakes in your credit file can affect your loan or credit eligibility. Incorrect address details, admin issues and other errors can prolong your credit applications too. So, if you’re looking to improve your credit rating or want to borrow money, be sure to investigate first. Want to know more? Take a closer look here.
3. Ensure you make your existing credit repayments on time, every time
This one is important. Repaying credit includes anything from mobile phone bills, credit card payments or car insurance. Paying credit back on time suggests to a lender you can cope with financial responsibilities. Remember, the more erratic and unpunctual your repayments are, the more likely you are to have a bad credit rating. So, keep on top of your repayments and watch your credit score increase.
4. Don’t make multiple credit applications in a short space of time
If you’re trying to improve your credit score by utilising a short-term loan or a line of credit – be conscious of how often you apply. Each application (whether accepted or not) stays on your file for around a year. If you’re trying to improve your credit rating, avoid applying for lots of credit in a short period – this sends a red flag to lenders.
5. Start your borrowing off small
If you’ve never had credit, you might find it hard to build your credit score. So, try applying for something with a lower value to begin with. For example, a cheap mobile phone contract will help boost your credit score.
6. Get a credit rebuilding credit card
A credit rebuilding credit card is one with a small limit but a high interest rate. The idea is you put some day-to-day purchases on there and pay off what you owe at the end of the month. Using a credit rebuilding credit card correctly shows you can manage this type of borrowing – a good signal for future lenders.
7. Consider cancelling your unused credit or store cards
When looking at how to boost your credit score, you should look back at your past cards. You might have several cards with a balance of £0 that you no longer use. If that’s the case, you might want to cancel them so their credit limits don’t count against you for future borrowing.
However, if you’ve had a card or two for a long time and you’ve consistently managed your repayments, this could work in your favour as it demonstrates to a lender that you can handle financial responsibility. That being said, everyone’s case is different, so it’s worth digging a little deeper to get some more advice. Martin Lewis, the money-saving expert, goes into more detail here.
8. Try a lower interest product
Borrowing money at a high interest rate isn’t ideal, but if you have a poor credit history and a bad credit rating it’s likely to be your only option. However, a credit line is different to a standard loan as there’s no end date; you can withdraw up to your credit limit at any time and are only charged interest on what you use. By borrowing and repaying on time over a sustained period, your credit file may start to show that you have responsibly managed this type of borrowing. A Drafty credit line works in this way and we have tonnes of reviews from extremely happy customers, which is why we’re rated ‘Great’ on Trustpilot.
9. Use your landline phone number on applications
Having a fixed-line number may help with security checks and provide evidence of stability, along with the number of years you’ve lived at your current address.
10. Check your credit files annually
Checking your file with credit reference agencies at least once a year can help flag any potential issues. And be sure to check a few months before you plan to make any major applications like a mortgage, just to make sure everything is as it should be.
You can check your credit score for free through companies like Experian or directly from other credit agencies. MoneyHelper has more information about how to access your credit score.
Consider a line of credit from Drafty
If you’ve read this and see yourself as financially responsible, apply for a Drafty line of credit today Representative 96.2% APR (variable). If you meet your repayments, you can boost your credit score through a Financial Conduct Authority-regulated company.
Disclaimer: We are not providing financial advice, these are just tips for informational purposes. Also, we are not affiliated to any of the external parties, these links are provided for reference only.
