Your credit score is very important. If you want to buy a new car, a house or pretty much anything using finance you need to have a good credit score to be able to get the best finance options available to you. This is something that at the grand old age of 34 I am beginning to realise – well ok I knew a few years ago that it was really important but by that time the damage was already done. As a student at Uni credit was thrown my way all the time – overdrafts, loans, credit cards, store cards you name it they wanted to give it to me. I really think that there should be more information available for teenagers about finances, had I been better informed I am sure that I wouldn’t have taken as much credit as I did.
Nowadays we don’t have a lot of things on finance and this is something that I am proud of. To cut a long story short my credit rating dropped and I had a bad score for a long time, it is only now starting to get to a point where it is good I had to work really hard to get it back into a good position.
This post is here to show you that all is not lost if you do have a bad credit score. It can be improved so longs as you are sensible.
Here are five ways you can improve your credit rating:
Spend within your means and set up alerts on your accounts
It goes without saying if you don’t have it don’t spend it. I know it’s not always that easy, but by only spending what you have it means you can’t get into any more financial trouble. Also if you use internet banking you can keep an eye on your bank account so you know exactly what you have to spend before you spend it. Our bank sends us a text message each week with our bank balance. They would also send us a message if we were to go over our overdraft or if a direct debit was due to come out but the money wasn’t in the account for it. Thankfully we have never needed this service but it is useful to know that it’s there.
Don’t make too many credit applications
If you do need to buy something on credit bare in mind the number of times you have or you end up applying for credit. Every time you apply for credit it is stored and kept on file on your credit score. If you have bad credit you will only be adding to your bad rating and it will mean that people are less likely to lend money to you or give you credit.
Use an eligibility checker before applying for credit
Many credit card providers now have an eligibility checker so before you apply you can see what your chances of being accepted will be. Although they perform a soft credit check this doesn’t leave a mark on your credit file so you can check back often especially if your credit score is increasing.
Use a credit card
Using a credit card isn’t a bad thing if you have a bad credit score Vanquis maybe able to help. By only spending a little each month and paying the amount owed back in full when your statement arrives you can slowly rebuild your credit rating. It is important that you make payments on time and never go over your agreed limit as that will always end up with your credit score worsening.
Keep track of your credit score
There are many free credit score checkers out there so make sure you sign up for one. I use ClearScore and the Credit Club from Money Saving Expert (MSE) every month to track my score. They help you to see where you can improve your score and shows the amount of credit/types of credit you have in your name. They can also be useful to make sure no one has stolen your identity and using your financial information to obtain credit fraudulently.
*If you are in financial difficulties seek professional help this post is my own thoughts and opinions and is not to be used as financial advice*
*This is a collaborative post*