How To Improve Your Credit Rating Quickly

Your credit rating is one of the most important statistics in your financial world. It can dictate a lot of things, from whether you’re approved for a loan all the way through to whether you get a mortgage or not. In short, if you have a bad credit rating, you may find that you struggle with some of the financial decisions and situations you’re going to encounter in life.

Thankfully, there are lots of ways to improve your credit score. Some of them will take some work, while others are startlingly easy (to the point where it’s a wonder they’re not more commonly known). Improving your credit rating is always worthwhile no matter what your score might be, so without further ado, here’s our guide on how to improve your credit score quickly.

Take out loans

No, really – it might sound counterintuitive, but taking out a loan can actually help you to rectify a bad credit score. This is because if lenders see that you’re able to make repayments promptly and regularly, then they’ll be more likely to give you loans in future. Of course, there’s the hurdle of the fact that many lenders won’t give you loans if you’ve got a bad credit rating, but there’s a remedy to this as well. Just look up providers who offer bad credit personal loans, find one that works for you, and apply – you’ll almost certainly be approved if you can make repayments!

Pay off outstanding loans

Again, this sounds a lot easier than it is for many people. However, if you have loans outstanding – no matter how small or seemingly inconsequential – then you should pay them off as soon as possible. Even if you’ve reached an agreement with the provider, it won’t look good on your credit score if there are loans yet to be paid. The sooner you pay them off, the sooner your credit score will no longer reflect that they’re outstanding, and you’ll find it much easier to move through life from a financial perspective. Don’t ever let loans sit unpaid!

Fix any credit score errors

Credit score mistakes are much more common than you might think they are. These errors can include misreporting in terms of closed or open accounts, as well as simple spelling errors in your name or address. It might sound frivolous, but the fact is that a credit score error can spell disaster for you later down the line, as it could negatively impact your credit rating. Be sure to go through your score whenever you get a chance and correct any errors that you spot. This is an easy and quick win for you, and it will help you further down the line.

Register on the electoral roll

If you register to vote on the electoral roll, you may notice an increase in your credit score. This is because many credit companies and agencies will use your electoral roll entry to find you and assess your creditworthiness, but they can’t do that if your entry isn’t correct and up-to-date. That’s why you should make sure the listing accurately reflects your current situation. Make sure it has your current address, your full name, and any other info you need to provide. This will ensure that there isn’t any misunderstanding when it comes to finding your electoral roll entry.

Don’t move too much

When we say “move”, we’re referring to moving house. Credit providers don’t like to see your living circumstances change frequently, as they might interpret this as issues with your rent payments or constant battles with your bills, which won’t look good on your credit score. If you can, try to remain in place, and if you absolutely must move, make sure you make the reason clear if the credit company asks you. There could be a simple set of reasons for your changing circumstances, but you need to make those apparent, otherwise companies could assume the worst.

Try a credit builder

Credit builder cards are a type of credit card with a low spending limit and (usually) rather high interest rates. They’re designed to help people with less favourable credit ratings recover their financial status a little, which is why the spending limits are so low. If you use the card correctly – never hitting the limit and always paying off what you purchase – then you should see an improvement in your credit score. This is because lenders can see you making regular repayments on a card, which reflects extremely well on you from a credit perspective.

A good credit rating is vital to get your home loan approved. You might also want to read if buying a home is cheaper than renting . We have a post that can solve your queries.

Don’t hit credit card limits

If lenders frequently see you hitting your credit card limit – which is information they may well be able to access – then they won’t think you’re financially responsible, and you’ll definitely be less eligible for loans or other credit boons. If you have a credit card, try as hard as you possibly can to avoid hitting the limit. You absolutely should never exceed the limit of the card, as this is a huge red flag for lenders that you’re too dependent on credit and that you shouldn’t be given a loan. Spend responsibly when you’re using a credit card and you should be fine.

If you don’t have a credit history, make one

In some cases, a nonexistent credit rating is just as bad as an unfavourable one. After all, if you’re a completely unknown quantity, then why should a lender take a risk on you? That’s why you should try to build a credit history if you don’t have one already. Anything from a phone contract to a bank account will help you to start creating a credit history, as will making sure to pay your household bills and perhaps taking out a store card. These are good ways to put yourself on the map credit-wise, and they’ll show lenders that you can be trusted.