Most people want to have the best credit score possible so they will qualify for the most attractive credit offers. Since the financial crisis, having a good credit score has become even more important.
Lenders will accept only applicants with the best scores and only the best of the best will receive the most attractive terms. There are several ways to increase your credit rating so you can be among this elite group.
Lenders check your credit report when reviewing an application for a credit card, loan, mortgage, mobile phone account, or utility service. Review this report regularly to verify that the information is accurate and updated. Any errors or missing information could negatively affect your credit rating.
Equifax, Experian, and Trans Union prepare credit reports and offer them at low prices so consumers can keep abreast of their status.
Timely payments and responsible use of credit are two things that lenders look for in new customers. Consumers should make repayments on time and in the designated amount. All bills should also be paid on time. A late or missed payment will remain on the credit report for three years or longer and may lead lenders to include that the consumer is a bad credit risk. Consumers with a good reason for falling behind with payments can add an explanatory note to their credit reports.
Unused credit accounts can work against efforts to get additional credit so these should be closed. When determining whether to provide credit, lenders consider the amount the consumer could potentially borrow rather than what is due. Identify unused accounts when reviewing the credit report and contact the relevant providers to close these. The chance of securing needed credit improves when the consumer has fewer, well-maintained accounts.
The Electoral Roll is used by lenders as a fraud protection measure. Register your current address for voting purposes so lenders can verify the address listed on your credit application. You should also take steps to protect your identity against fraud. Look for unfamiliar information when reviewing your credit report. This may include new credit applications you did not make, a new account you did not open, or a large increase in the amount of money owed to creditors. If an issue is discovered, immediately contact the relevant lender to have it resolved.
Just because an issue took place in the past does not mean that a prospective lender will not see it. Individual Voluntary Arrangements, County Court Judgments, and bankruptcies remain on the credit report for at least six years. Prevent these from occurring by managing credit responsibly. This means using only the amount of credit that you can afford to repay.
By closely monitoring the credit report, making payments on time, and closing unused accounts, you are taking steps to improve your credit rating. Registering on the Electoral Roll and diligently protecting your identity will also be helpful. Before you know it, your credit score will be heading higher and with it will come more attractive credit offers.