How easy is it to improve your credit score?

If you’ve ever been rejected for finance or credit, then you may be wondering how you can improve your credit score. If you have you have bad credit then you may think it’s impossible to increase your credit score, However, not all hope is lost. Refused Car Finance are a car finance provider who help people get car finance with bad credit. They have put together their top tips on how to increase your credit score the right way. It can take time as you need to build up solid evidence that you can be trusted to pay back any loan or finance on time and in full, but it can be done. Let’s take a look at the top tips…

Check your credit file

The first thing you should do is check your credit score. If you know you have bad credit or have already been refused for finance, then you may think this is useless. However, your credit file can show you an insight into your habits. You can use an online credit referencing agency such as Experian or Equifax to check your credit score for free.

  • You should firstly check for any mistakes on your credit file. Inaccurate information or information that isn’t up to date can hold your credit score back.
  • You should check the financial links/partners section. If you have taken out finance with someone else as part of a joint application then you will become financially linked. If you no longer have active credit with someone who has bad credit, then you should disassociate yourself. This is because their bad credit score could be dragging yours down too.
  • Also check your finance applications and make sure they all look familiar. If not, then you may have been the victim of a fraudulent application in your name.

If you see any mistake or need to change anything on your credit file, you can contact your credit referencing agency who provided your credit file to change this for you.

Pay all your bills on time

This may be hard if you have bad credit due to missed payments. However, this is one of the biggest ways in which you can improve your credit score. When you apply for finance or credit, potential lenders want to know if you can be trusted to pay back your loan each month. A few months’ worth of evidence that you can pay all your bills on time and in full can help to improve your credit score.

Register on the electoral roll

In the UK, the electoral roll is a list of all the people who have registered to vote in the UK. Even if you don’t want to vote in general elections, you should still register to the electoral roll. You may be wondering what this has to do with your credit score. If you are registered on the electoral roll it will be recorded on your credit file and lenders can use this information to verify that you are who you say you are and also verify your current living address.

Keep your credit utilisation low

Many people are still under the assumption that having a credit or store card can harm your credit score. It is recommended that you keep your credit utilisation under 50% at least. This means that if your maximum credit limit on a card is £1000 then you should only spend less than £500 on that card. Having numerous cards that are nearly maxed out can seriously harm your score. You should also try to pay more than the minimum value each month. The minimum payment is very attractive; however, it can indicate to lenders that you are struggling to repay your debt.