7 things that can help positively with your UK credit score…

Your credit score really is like opening a can of worms, with at least 3 credit reference agencies in the UK each one has a different way of calculating your score and not all companies report your history in the same way.

Credit: Pixabay

On the flip side, not all financial organisations use the same credit reference agency. So you could have a great score on one CFA but an average score on another.

At my own company our underwriting department use 2 CFA’s so we get an overall picture of a client; Experian and Callcredit. There are benefits to both but Callcredit in our opinion has the most up to date information.

Generally, looking after those pennies and ensuring your bills on time, will lead to a higher credit score. Generally companies will want to see that you haven’t been paying that latest credit card bill late and that you aren’t just paying the minimum payment.

I thought I’d put together 7 things that could positively help with improving your credit score:

1. Register on the Electoral Roll — I wish I got £1 for every time we propose a client to a major funder for them not to be registered on the electoral roll. Apart from it being illegal is you meet the conditions, it really does help with establishing where you live.
2. Don’t use all your available credit — Some people find this difficult, as once you’ve got a lot of credit it can be difficult to pay off. But don’t use more than 255 of your available credit each month and you should see an improvement. Swap credit cards for loans where possible.
3. Do you need car insurance? Then pay that little extra and pay it monthly, it gets reported to the CFA’s and shows that you are able to make timely payments each and every month. Some companies such as Aviva, have a scheme where it doesn’t cost you any extra to pay monthly.
4. Long standing accounts, usually 5 years or more can really help your credit score. But you’ve still got to make sure that they are paid on time each month and throughout the history of your account.
5. Higher credit limits — Credit limits of £5k or more shows that the lender really does trust you with money. Having higher credit limits will show positively in the scores provided by the credit reference agencies.
6. Don’t have too many credit checks — It can be difficult sometimes, but once you’ve opened a new credit or mobile phone, try not to apply for anything for 6 months. Lots of credit checks in a short space of time can have a detrimental effect on your score.
7. Finally — Pay your credit card balance off or at least keep the balance low, this will have a huge effect on your credit score.

Poor Credit History

If you have suffered poor credit history or missed payments, it may take you some time for the lenders to ignore these. But just because you’ve got those black marks on your file, does’t mean you need to carry on with them.

I’ve spoken with many people who think that because they’ve missed one payment its already caused damage, so they might as well carry on. This is one of the worst things you can do.

Repairing your credit history

There are many companies who will take your money and offer to repair your credit history, but you can do this yourself. You can subscribe to the CFA’s such as Equifax or Experian, go through it and make sure everything is up to date. Its important to make sure the following items are correct:

1. Your address, this is really important and again make sure that you are on the electoral roll.
2. Is your credit report showing a missed payment but you know that its a mistake? Get in touch with the finance company first and ask them to correct it. I recently had a customer who used the bank account switching service and his loan Direct Debit didn’t get picked up, he got a late marker. He spoke to the loan company and they corrected it.
3. Financial Associates — Had a bank account with an ex and he/she likes to miss payments. If you have no financial obligations, as the CFA’s to disassociate yourself with them.

Check Your Credit File with a 30 day Free Trial

Check your credit file with a 30 day free trial to CheckMyFile.com — It allows you to get your credit report from Experian, Equifax and TransUnion. It will show your history for the last 6 years, enables you to track your balances and helps you to identify any issues.

Click the link to find out more: CheckMyFile.com — (Affiliate Link)

Have I missed anything?

If you think I have missed anything, then please do not hesitate in dropping me a line in the comments box below? Have you got any tips that could help other people?