How to Get Back In Control of Your Credit Rating

How to Get Back In Control of Your Credit Rating

Your credit rating can have a huge impact on many aspects of your life. Your credit score is used to determine whether or not you are eligible for loans and other credit products like bank loans, credit cards, car finance, a mortgage, and even smartphone contracts. But it’s not just borrowing that it can affect. Your credit rating might be taken into account if you apply for a job in a certain industry like banking, for example. A poor credit rating can make it harder for you to get what you want in life - whether you want to purchase a property, get a job working with money, or even get the latest iPhone. So, what can you do, starting today, to see your credit score improve?

Check Your Credit Rating:

First of all, it’s going to be difficult to improve your credit rating if you don’t know where it stands. There are plenty of free and paid services that you can use to inspect your credit score, see what’s bringing it down, and take a peek at what lenders see when you apply for any lines of credit. Credit Karma, Clear Score, and Experian are just some options that you can use to get your credit report for free. Once you can see your credit rating clearly, it will be easier for you to figure out what steps need to be taken next in order to start improving it.

Check for Mistakes:

Along with knowing what your credit score is and why - another important step of checking your credit report should be to check for mistakes. Simple mistakes like recording a missed payment when you know that you actually paid on time should not happen and are, thankfully, quite rare, but there is some risk of it occurring. Going through your credit report carefully to look for any potential discrepancies that could be unnecessarily bringing it down could be a way to improve your credit rating quickly, as you can apply to have these mistakes removed.

Repay Debts:

Existing debt can have a huge impact on your credit rating, particularly if you have maxed out credit cards or are utilising a lot of the money that is available to you. While repaying your debts will improve your credit rating slowly, it’s important to get started as quickly as possible. A good way to repay all your existing debts quickly is to consider a consolidation loan, which can be used to repay several lines of credit at once, leaving you with just one debt to worry about. If you have a poor credit score, these loans for bad credit from New Horizons can be an ideal choice for consolidating your debts. New Horizons is a credit broker that will search a panel of trusted lenders to find the ideal loan options for you. The good news is, 90% of applicants are accepted!

Keep Accounts Open:

Even if you have managed to repay all of your overdraft or credit card, don’t be tempted to close the account - unless you’re not sure that you can stop yourself from maxing it out again in the next few days. Closing your accounts reduces the amount of credit that you have available to use, and this can actually do more harm than good. When you have a credit card that is mostly untouched, this will go in your favour with creditors and actually increase your credit score, as it shows that you don’t need to rely on credit to get by. Ideally, you should aim to keep your credit card balance at no more than 50% of the funds available at any one time.

Make Repayments:

If you can’t pay debts off in full or have repaid as many debts as possible with a consolidation loan, the next step is to make your repayments on time each month. Missing just one repayment or being late can wreak havoc with your credit rating, so make sure that they are set to be paid on a day of the month that is convenient for you. Set up a direct debit from your bank so that payments are made automatically.

Pay Your Bills On Time, Too:

You might be surprised to hear that your utility bills can also affect your credit score. While they may not have the same impact as a debt like a loan or credit card, paying bills on time will also go in your favour - so treat these in much the same way that you do your loans and other lines of credit to ensure that you don’t miss any repayments.

Consider Saving to Improve Your Credit Score:

Finally, consider using a service like Loqbox to save up while improving your credit score at the same time. This service works by reporting the payment to the credit reference agencies each time you pay in, but unlike loans and credit cards, you can access all your savings at the end of the year.

If your credit rating is hurting your life, the good news is that you can start improving it right away.

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