How to Improve My Credit Score
How do I improve my credit score? This is perhaps the most common question people ask when it comes to credit score, particularly if there's clear room for improvement.
If you want to grow your credit score then you can do so by following our top 10 tips:
1. Pay your bills on time
Payment history makes up a huge 35% of your total credit score and is therefore the most important factor to consider. If you're a regular late payer, or miss payments altogether, then your credit score is never going to improve.
2. Settle your bills twice a month
There's no rule to say you can't pay your bills more frequently. It might be worth bearing in mind that updates on credit activity are sent every 4-6 weeks, which means that these updates are most likely to be reflected once a month on your credit report.
3. If you don't have one already, get a credit card
Using a credit card in a manner that is consistently responsible is a well-established method of improving your credit score. Responsible credit card use shows the credit agencies that you can be trusted with credit and they'll reward you by boosting your rating.
4. Under use your credit cards
Whether you're a new or experienced credit card user, the principle here is exactly the same. If you're spending 80% or 90% of your total available credit each month then - even if you always pay it off - the credit agencies will associate you with an element of irresponsibility and your credit score will not grow as quickly compared to if that figure was at just 10% or 20%.
5. Don't cancel any credit cards
This is a common error made by people looking to grow their credit score, and it actually has the exact opposite effect. Closing a credit card instantly reduces your overall credit limit and this is not looked upon favourably by the credit agencies. However, if you have a credit card that you have not used for a long time, then we suggest that you cancel this.
6. Take up different types of credit
If you're certain you can afford it, then by taking out different types of credit you can improve your credit rating to a small degree. You may want to consider purchasing your next large household item on a finance deal for example.
7. Raise your credit limit
Assuming your spending patterns do not increase, then by raising your credit limit – on a credit card or overdraft for example – you can grow your credit score modestly as it shows the credit agencies that you're more than capable of remaining in control.
8. Dispute errors on your credit report
Credit report errors are pretty common – for example, you may have been incorrectly penalised for a 'late' payment that you actually made on time. Contact the credit agencies to get any such errors reversed and your credit score will go up accordingly.
9. Negotiate with your creditors
Assuming your spending patterns do not increase, then by raising your credit limit – on a credit card or overdraft for example – you can grow your credit score modestly as it shows the credit agencies that you’re more than capable of remaining in control
10. Double check your credit limits
Often, the credit limits that appear in your credit report can be listed as lower than they actually are. If this is the case then you should contact your credit provider and ask them to inform the credit agencies of the real limit. Once these limits are amended, your credit score will go up a little.
What's Your Credit Score?
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