Whether you’re preparing for a large credit application like a mortgage or simply want to boost your score for the future, a healthy credit score can make a big difference in your likelihood of getting an application accepted or rejected. Thankfully, there are plenty of simple strategies you can put in place.
Here, we explore five easy ways to boost your credit score for financial success.
Table of Contents
1. Pay bills on time
When it comes to your credit score, payment history can have a significant impact. Paying your bills in full and on time will prove to lenders that you’re reliable and can be trusted to borrow. To help you pay bills on time, create payment reminders or set up direct debits and standing orders to avoid any late payments. If this isn’t possible, set up automatic reminders that pop up on your phone when it’s time to pay a specific bill.
2. Avoid unnecessary credit searches
Having lots of hard searches on your file within a short space of time can be detrimental to your score, particularly if you’re applying for something like a mortgage. This is because too many searches can make you appear risky to banks and building societies. For this reason, it’s wise to avoid any unnecessary and avoidable credit searches. You could create a savings account so that you have a pot of money set aside for any unforeseen expenses in the future to reduce the need for quick forms of credit.
3. Build a credit history
There’s a myth that using no credit is good for your credit score, but this isn’t actually true. You need a credit history to show lenders that you’re a trustworthy borrower – and this means using credit wisely. This could be something as simple as taking out a credit card to pay for monthly expenses like petrol and food shopping and paying the balance off in full and on time.
4. Reduce credit card balances
While building your credit history, it’s wise to use as little credit as possible. This is because the lower the amount of available credit you use, the more attractive you’ll appear to lenders. For instance, if you take out a credit card with a limit of £8,000 and you use £2000, this will be viewed more favourably than if you used £5,000. This is referred to as your “credit utilisation rate” which you can find out more about through Experian.
5. Register on the electoral roll
One of the easiest ways to boost your credit score is to register on the electoral roll. This is essentially a list of everyone who’s registered to vote in the UK, with their names and addresses. The reason this is beneficial for your credit score is your details get recorded on your report, which helps lenders verify your identity. Your credit score will be boosted as a result, making this a quick and easy win.
Hopefully, these top tips will help you to build a strong credit score with ease. Remember to always seek financial advice from a qualified professional before making any large money-related decisions.