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How to Increase your Credit Score

Is your credit score not looking so good? Find out how to increase your credit score, to better your mortgage options!

You’re probably here because of one of three reasons:

  1. You don’t know what a credit score is
  2. Your credit score is pretty poor
  3. You misspelt Redditt Scone (it happens)

If you’re one of the first two, congratulations, this page will provide useful and insightful information on credit scores. If you’re the third, hit the back button… there will be no threads about scones on this page.

Welcome to MO’s article! This week we’re here to talk about how to increase your credit score! (Yes, the title is a bit of a giveaway).

credit score checklist

What is a credit score?

Unsure what a credit score actually is? Well, your credit score is your financial footprint essentially. Every loan you’ve taken out, every bill you haven’t paid and ever credit card you’ve owned – it’s all collected together as a digitised credit score. It’s how lenders and brokers judge you as a borrower – especially for things like Mortgages. Credit ratings are an essential part of securing a mortgage, and bad credit will affect your chances of landing yourself one. But more on that in a bit.

Your credit score is judged on different scales by 3 different credit agencies – Equifax, Experian and Callcredit. And to make it even more confusing, these scales all have different scores! They score out of the following:

  • Equifax score out of 700
  • Experian out of 999
  • Callcredit scores out of 5

We hate to be the bearers of bad news, but without a good credit score you probably won’t get a great rate on a mortgage (sometimes, you may not even be approved for one). Luckily for you though, you’re reading a article on how to improve your credit score, so even if you have bad credit you’ll be able to, well, improve it.

How to Increase Credit Score

The first step to improving your credit score is knowing where you stand. Yes, check your credit! There are free services that provide you with a full credit report, so you can see your credit score. Sites like Clear Score, MSEs Credit Club and Noddle are all free credit checking sites. You’ll be able to see your credit profile and your score. Some of these services show you what sort of rates you could get on credit cards and loans too. In your credit report, you’ll be able to check for any errors – which might be affecting your score. Sometimes, incorrect information is on your credit report. If you’ve been a victim of fraud, this can also negatively impact your credit score. You can appeal this, and if accepted, it will be removed from your report.

Step 2 to improving your credit is to make sure you’re on the electoral list. Yes, by registering to vote, it can actually improve your credit score. Similarly, if you stay at the same address for longer it can positively impact your credit score too. Building up a presence in the world can do wonders for your credit score – and no, on social media doesn’t count… You can start putting your names on bills and paying them on time. As well as taking out a loan or credit card and making regular repayments on it – just don’t land yourself in debt (as this will harm your credit score).

Finally, clear any outstanding debt you may have. No, not the money you owe your mate Steve… Any financial product debt you may have. Credit cards, loans, overdrafts on bank accounts or even car finance payments – by staying on top of these, paying them on time and clearing them, your credit score will begin to improve. Steve can wait for that tenner… One financial product that doesn't affect you credit score is your student loans! Yes, when you apply for anything, like a mortgage, your student loans will not be taken into account as an actual debt.

Steer Clear

There’s a lot of companies out there that will offer to ‘rebuild your credit score’ for you. Which will be an expensive con. See, they’ll only review your finances and suggest you do pretty much everything we’ve suggested. It’s a lot of investment for something you can do on your own.

Your credit score is in your hands. You can use these tips to improve your credit score, meaning you’ll get better rates on mortgages, loans and credit cards. It’s an investment of time and a little effort to improve your financial opportunities for the future. A better credit score means better mortgage rates!

Want to know if you can land yourself a mortgage with your current credit score? Speak to a member of the team to find out!

LauraWaller

Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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