How to improve your credit score?

Your credit score is important, the higher your credit rating the better your chances of being accepted for credit at the best rates. It can influence your ability to get things like credit cards, loans, mortgages and more.

 You can check your credit profile on a number of websites but we recommend CheckMyFile, you get an accurate overview of your credit profile, Try it FREE for 30 days, then £14.99 a month – cancel online anytime*

*CheckMyFile will go to a third party website which Amplo Mortgages has no responsibility for any of the content on the website.

How can you improve your credit score?

Prove where you live

Register on the electoral roll for your current address – you can do this even if you’re in shared accommodation or living at home with your parents.

Build your credit history

If you have no little or no credit history, it can make it difficult for lenders to assess you. This is quite a common problem for young people or those who have just moved to the country.

You are able to build a credit history by getting a credit builder card – the card usually have low credit limits and a higher APR but it’s a good way to start building a credit history. If you spend a little bit on it and pay it off within the month, you won’t be affected by the high APR on the cards.

Make regular payments on time

Ensuring that make your payments on time for any finance agreements that you may and/or paying at least the minimum payments on your credit cards shows to lenders that you’re a reliable borrower.

Check for errors and report any mistakes

Small mistakes as small as a mistyped address can affect your score and could be enough for a lender to refuse your credit. It’s worth checking your credit report to make sure all the information on it is accurate and up to date.

Check for fraudulent activity

A fraudster could gain access to your personal details and from there, they could take out credit in your name without you being aware. If you spot anything on your application that is incorrect, it is best to report it to the bank or lender who the credit is with and from there it can be investigated further.

What are the benefits of improving your credit score?

A higher credit score will mean that you will be seen as a lower risk to the lender and you’ll be more likely to be approved for credit. Improving your score can benefit you as:

  • You could have a better chance of credit cards, mortgage and loan approvals

Having a higher score will mean that you’re more likely to be accepted and you may have more choice of credit offers and providers. As you may have more options available, it can help save you more money as you will have access to more competitive rates.

  • Lower interest rates

Lenders will think you are lower risk and as a result, they may offer you better interest rates on loans and credit cards because you’ll been seen as responsible and capable of making payments on time. Therefore, borrowing can be cheaper. For example, a good credit score can improve your chances of being approved for a low interest loan and a 0% spending card.

  • Better car insurance rates

Your credit score can affect the interest charges if you choose to pay for your car insurance in monthly instalments.

  • Higher credit limits

Having a good credit score usually means that you have better chances of borrowing larger amounts or your credit card limit being increased.

How to keep your credit score healthy?

Once you have improved your credit score, you will probably want to maintain that healthy credit score that you worked so hard for.

Limit the number of credit applications

Applying for credit frequently within a short space of time can make lenders think you’re desperate for credit and you’re currently having finance problems; presenting yourself as higher risk.

Only borrow what you can borrow

Borrowing beyond what you are able to afford can lead to you being unable to pay back what you have borrowed. This can lead to you getting a County Court Judgement (CCJ), an Individual Voluntary Agreements (IVA) and even bankruptcy.

If you were to get one of these, it will stay on your credit report for at least six years and will have a significant impact on your credit score (negatively).

Keep an eagle eye out for fraudsters

It is good to keep an eye on your credit report and keep an eye out for any fraudulent activity. If you spot applications that you didn’t make or see an increase in the amount that you owe, you may be a victim of fraud.

In the unfortunate event that you were a victim of fraud, your lenders should be able to fix any damage to your credit report quickly once they’ve investigated and established the facts.