Your credit rating is important because it can influence and affect your ability to obtain credit cards, personal loans, mobile phone contracts and mortgages. If you are experiencing difficulty getting accepted for finance or simply want to boost your rating in order to access some better deals, there are things you can do to give your rating a boost.
You credit rating is one of the major tools that lenders use when they are trying to decide whether to offer you a credit card or a personal loan. It can also determine how much you can borrow and it can also have an influence on the interest rate that you are charged.
There are some really competitive finance deals around at the moment such as the personal loan rate of only 4.7% APR which is currently available from CBonline, so it makes sense to see how good your rating currently is and what steps you can take to boost it higher.
Factors that affect your score
There are a number of factors that can have a strong influence on your credit score and the first one to consider is what levels of existing debt you current have. Banks and credit card companies are clearly going to be reluctant to consider lending you more money if your credit file shows that you already have high levels of borrowing and could become financially over-stretched if you add to the tally.
Missed payments are bad news and if you make late payments on your mortgage, credit card, utility bills or loan repayments then even if you bring the account up to date, the missed payment will show on your file for up to 6 years from the date you made the remedial payment.
If someone has taken you to court over non-payment of a debt and you have a County Court Judgment or a Decree if you are in Scotland, then there is not much that you can do to repair the serious impact that this can have on your credit score until it disappears some six years later. If you settle the debt after going to court or there is a reasonable explanation as to why you were sued then you can ask for the Judgment to be shown as satisfied and also request that an explanation is put on your credit file, if it is accepted.
Another common mistake made by many is to make too many finance applications in a short space of time. Every time you apply for credit it shows on your credit report and this can be detrimental to your credit score because it looks like you are trying to obtain too much finance or are in financial difficulties even when you are not.
If you simply shopping around for a good deal make sure that the lender registers a quotation search which then confirms that you are not making a full application for money at this time which should not then harm your credit score.
The other major factor to consider when trying to boost your credit score is to make sure that you are registered on the Electoral Roll as this information is often used to confirm your residency at an address and if the lender can’t find you on there, it can result in your application being declined.
Check your credit report for any errors on a regular basis and make sure you correct any details that are wrong as soon as possible. If you take all these steps and do everything that you can to protect and boost your credit rating you stand a much better chance of being able to get the finance deals that you want.
Alex Lawson values personal financial health as one of the marks of a successful adult. He enjoys using his years as a financial counselor to help people make smart money decisions and achieve their goals.