This page is useful to anyone needing details on improving and preserving their credit score. It features information on what can affect your credit score and how you can check it.   

When trying to obtain financial products, such as a loan or credit, this can  be impacted by the details featured in your credit report.

How does a bad credit score happen?

Your credit rating can be affected by just some of the following:

  • Delayed or late payments on contractual arrangements and other credit facilities
  • CCJs
  • Records of other adverse financial milestones such as a default or Bankruptcy.

There are some useful tips that we’ve compiled that can help to boost your credit rating.

Improve your credit score by making payments on time

To help maintain a positive credit rating, it is highly recommended that you continue to make regular on-time payments to creditors. By doing this you are demonstrating your ability to budget and keep up to date with regular financial commitments. In the long term, by demonstrating this behaviour, you can help to ensure that creditors won’t refuse you credit at a point when you may need it most. Indicators on your credit report that highlight any missed payments could affect your ability to obtain credit.

Getting credit from short term lenders may affect your credit rating

If you have ever used the services of a short term credit provider, often referred to as payday lender or loan and subsequently paid it back on time, some creditors may deliberate on this when they are assessing an application for credit. This is because lending from short term credit providers can show that you required cash at short notice and did not have any alternative means of covering this. As a result a creditor’s approach to lending to customers who may have used such lines of credit could be seen as a potential lending risk.

credit-score-badLots of credit checks or scoring can affect your credit score

In the stages of searching for financial products, and obtaining ‘agreements in principle’ from a lender, the process will most certainly include a credit check. This however may present a problem. Many credit checks over a short  timescale could indicate to prospective lenders that you are applying for a lot of credit and potentially desperate. Ask any potential provider if the process during the application involves a credit check. Most firms will normally inform you that a ‘footprint’ will be left on your credit file when going through the process.

I don’t have a credit history

In the event you have never needed to get credit, this may affect  your ability to obtain it in the future. If lenders cannot see any detail on how you manage payments to existing creditors this could affect their evaluation of you being either  a high or low risk borrower. While this may be an issue in the short term it can be easy to rectify. If you already have a gym membership or contract phone this can help. Making payments and clearing outstanding balances on financial products like a credit card can also help you to shape and develop a credit history. The key thing here is to make sure that any providers that you use will share your paying habits with  a credit reference agency such as Experian or Equifax.

If you owe too much elsewhere this will affect your credit score

Try to settle as much of your existing debt then wait for three or months or more before applying again. If you have credit sources that have reached their limit this can also have a detrimental impact.

credit-score-goodRegister on the electoral roll

If you are not registered on the electoral roll it can affect your ability to get credit from lenders and is also deemed as a criminal offence.
While there is an easy solution to fix this what you should remember is that it could have a big effect on your credit applications. Registering on the electoral roll provides assurances and evidence of your current address. It also demonstrates stability. In order to register on the electoral roll you will need to contact your local authority.

Financial links and relationships with ex partners

Always consider who you are currently connected to in a financial capacity. For instance this could be an ex business partner, or partner with whom you shared a joint bank account or held avenues of credit. Ensure any detail in your credit file is correct and up to date. This may make a difference should you apply for credit as an individual or with this person. If you are not currently connected you can have a Notice of Correction applied to your credit file. You can do this by getting in touch with any of the major credit reference agencies which include Equifax, Experian and Call Credit.