Your credit score counts for a lot more than just mortgages these days. With a low credit rating, you can find it difficult to open a bank account, get a new phone contract or buy a car. Keeping your credit score healthy can ensure that it never stands in the way of you owning a house or taking out a loan. Here are a few simple ways you can boost your credit score.
Make payments on time
If you often pay bills later than the agreed date, this could be the reason your credit score is low. To rectify this, ensure that you are paying your utility and phone bills on time. Set up a standing order with the company and your bank if you have trouble remembering which date to make payments, so it’s out of your hands and over time your credit rating will improve.
Eradicate your overdraft
Having an overdraft for a long time can negatively affect your credit score. If you are able to, try to get out of your overdraft as soon as possible to boost your credit rating.
Get out of debt
Any debt that you have will be affecting your credit, so if you have any plans to take out a loan in the future or invest in a new phone or car, you should first get rid of your debt. Start by making minimum payments or above to lenders and set up a debt repayment plan if your debt is especially big. Once you’re in the black, you credit score will begin to rise.
Register to vote
Getting on the electoral roll is important, and not just to voice your opinion in the polls. If you are not signed up to vote, you won’t be able to get credit for anything, whether that’s something as large as a house or as small as a credit card. You can apply online to get on the electoral roll at any time of year; it just needs your national insurance number and a few minutes of your time. Once you’re signed up, your credit rating will grow.
Invest in a credit-building card
If you have especially bad credit, applying for a credit-rebuild card could be the route to a better score. Credit-rebuild cards have high APR so they need to be used carefully. As long as you make regular payments and repayments on the card, with no lateness, your credit score will improve over time.
Get rid of old accounts and cards
Whether it’s an old current account or unused credit cards – keeping unused accounts open can negatively impact your credit rating. Cut up any old cards and contact your bank to ensure that all of your accounts are active and healthy, with no debt or overdrafts.
Separate yourself from low scorers
Being financially linked to someone else can be great for the simplicity of joint bank accounts when it comes to rent or mortgage payments, however it can also be detrimental to your credit score. If the person you are linked with has a bad credit rating, this can also affect yours. So if your partner or housemate has a particularly bad credit history with various unpaid loans and late repayments, avoid a joint bank account or loan to ensure that your credit rating is not affected.