Your credit score is forever changing, however, there are steps you can take to improve it or keep it healthy.
Establish your credit history
If you don’t have a credit history, or your credit history is brief, it can make it more troublesome for lenders to assess you.
As a result, you may have a lower credit score. For young people, and people new to the country having little to no credit history is a common problem.
Things you can do such as, taking out a small form of credit such as a store card or a mobile phone contract, opening a bank account if you don’t have one already, getting on the electoral roll if you’re eligible, or managing your utility bills well can all help to build your credit history.
Prove where you live
Even if you don’t own your own home, or if you’re in shared accommodation, you can prove where you live by registering on the electoral roll at your current residence. This way, when applying for credit you can prove where you live.
Be a reliable borrower
If you have a credit facility, such as a credit card, making reliable and regular payments will also improve your credit score. It’s a way of showing lenders that you’re a reliable borrower and you’re able to responsibly handle credit.
Having an older, well-managed account can improve your credit score. Just be mindful of the number of lines of credit you have, any unused credit cards can have a negative impact.
Be aware of your credit limit
It’s called a credit limit not a target. By not using all of your available credit you can actually boost your credit score. Commonly referred to as credit utilisation, it just means the percentage of your credit limit that you have used. For instance, if you have a credit limit of £2,000 and you’ve used £500, your credit utilisation is 25%.
Typically, a lower percentage is seen more positively by companies and as a result it can boost your credit score.
Why does boosting your credit score matter?
If you’re wondering why it’s worthwhile to boost your credit score, it’s simple really - the better your credit score the more likely you are to be accepted for credit.
If you’ve been doing all the right things to keep your credit score healthy and you’re looking for a new purchase or balance transfer credit card, Monva can help you find the deal for you. Simply conduct a search today.
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