The Three Most Effective Tips to Boost Your Credit Rating
Check your credit file before applying for your next loan.
The best thing you can do before applying for credit is to check it to see where you currently stand. The benefit of checking your credit is that you can see if there's a chance that you may be rejected before it even happens. This might be for a loan or a new sofa, and if you have your heart set on something and get rejected, it can be disheartening. It's recommended that you check with all three main agencies if you're based in the UK to get a full idea of what the state of your credit is. As of 2018, you can access all files for free, so don't be misled into paying for a credit check, as this is all free of use.
Register to vote.
Registering to the electoral roll is the easiest way to get an immediate boost for your credit rating. You can sign up online, and the process is relatively simple. You'll simply have to add some information about yourself, including your name and address, as well as your national insurance. This information is all confidential, and your local council isn't allowed to sell or pass on this data. Also, note that if you've checked online and you have a good credit score, but you haven't registered to vote, these online tools don't take this into account, but lenders will. Don't get a shock when you go to apply for a loan and find out that you've been rejected because you haven't registered.
Keep on top of your credit card payments.
This is one of the most important factors in keeping a healthy credit score. A credit card is very useful for paying for large items and spreading the cost, for emergencies that may appear that you need to cover and for virtual terminal credit card processing. Make it your number one priority each month when you're paid to pay any loans or credit card debt you've accrued. This should be the priority even if it will impact what you can do that month as if you miss a payment, it can cause a huge drop in your credit rating that can take years to rebuild. A good strategy is to set up a direct deposit into your credit card and any loans each month, so that you never forget to make a payment. It's recommended that the direct debit you set up is at least the minimum monthly payment that you have to make, and then you can look at overpaying once you know how much disposable income you have after bills and others have come out of your account. Overpaying is often a good strategy as the faster you can pay off a loan, the less you'll be paying in interest over time.
If you find that you're struggling to keep up with your monthly payments, try contacting your lender. It may be that you can negotiate new payment terms, most likely over a more extended period of time, which will make each month a little easier.