Bad credit and the issues associated with it affect many families throughout the UK. Having bad credit can make it harder to borrow money when you need it, impacts tenancy applications and can cause major stress. It is important to know the best ways to improve your credit score so that you and your whole family will be in a better financial position.
Fortunately, there are plenty of ways that hard working families can improve their credit. It will take some hard work, patience and perseverance, but the results will be worthwhile. It can help to discuss finances with your family so that everyone understands what they have to do to help you build up good credit.
Correct Any Mistakes In Your Score
If there are any mistakes in your credit report, no matter how small, you should ensure that they are corrected. Identity theft and fraudulent activity are sadly common, and any inaccurate information could negatively impact your credit score. You can get your credit report for free from any of the major credit report companies.
Check Your Score Regularly
Keeping a close eye on your credit score can be invaluable to ensure it keeps rising. Consider checking in each month to see how your score has changed. There are credit score checkers that will inform you of the actions you’ve taken and how they impact your score. This can help you better understand what you need to do to improve and what you should avoid.
Look At Bad Credit Mortgages
You might think that having bad credit would bar you from taking out a mortgage, but this is actually inaccurate. There are lenders that offer bad credit mortgages for families and individuals experiencing financial difficulty. Taking out a bad credit mortgage can help you build up your credit score. Find out more from the expert bad credit mortgage brokers at MoneyNest.
Register For The Electoral Role
Being registered to vote at your address is critical and can improve your credit score instantly. Lenders and credit report agencies use the electoral roll to check your address and verify your identity, so having incorrect information can bar you from getting credit and lower your score. It is simple and easy to register on the electoral roll on the government website and takes around five minutes.
Keep Credit Utilisation Below 30%
Your level of credit utilisation can also make a big difference to your credit score. The lower, the better is generally the rule, but to improve your credit score, you will still need to use some of your credit to build your payment history. Keeping your credit utilisation below 30% of your total credit taken out is ideal. So, if you have a credit card with a limit of £1,000, you should use no more than £300 at a time.
Pay Your Bills On Time
Paying all of your bills and particularly credit card bills, on time is crucial to improving your credit score. The longer your track record of bills paid on time, the better your score will be. With credit cards, it is best to pay more than the minimum to ensure that you don’t lose out by paying more interest than necessary.