A great credit score can make life a whole lot easier, especially if you’re looking to rent, buy a property or make another significant purchase. If your credit rating isn’t looking healthy, don’t despair! There are plenty of ways to improve your credit score and here are 5 ways in which you can do so today!
Bulk up your profile
Those with little to no credit history may find they have a tough time applying for credit. Even if you’ve had credit in the past, increasing your credit history will have a better impact on your score. Before you go applying for every type of credit possible, be aware that the best ways to boost your score include a credit card or phone contract. Only apply for these if you have no to little credit history, otherwise its best to focus on paying off your outstanding debts first. If you are applying for credit, don’t apply to several lenders in one go as this can have a negative impact on your credit rating. Do your research first to find the best rate and your chances of acceptance.
Extend your credit limit
One way to boost your credit score today is to ask to extend your credit limit. This is an effective option if you can’t financially afford to pay off all your debts. For example, if your current credit card balance is £1000 and you ask to extend your credit to £2000, you’re cutting your credit use in half. Just ensure that you don’t put anymore credit on your card.
Don’t miss another payment
Make sure you don’t miss another payment by organising your finances. Write down your income every month and expenditures, before considering how much you can realistically afford to pay off your debts. Instead of making one monthly payment, try making two as your credit report is updated every month, so two payments will bring your credit down. Furthermore, if you need to make a big purchase on credit, it won’t affect your score as much.
Cancel unused store or credit cards
Ensure you cancel unused store or credit cards as these have an impact on your overall credit score. While different lenders look for varying aspects, having unused credit can be a turn-off. There can also be a greater risk of fraud as you’re unlikely to check these accounts.
Negotiate your balance
If you’re in a position to settle some outstanding debt, negotiating your balance with your lender can be an effective method of improving your credit score. Some lenders are happy to settle debts at a reduced cost if you pay it off in one go. If you’re happy to negotiate your outstanding debt and receive an offer over the telephone to reduce the amount you pay off, ensure you ask for it to be sent to you in writing as confirmation. Alternatively, if you’re struggling to pay your debts, ask if a payment plan can be set up so you can meet the minimum payment each month.