Want to improve your credit score? Well here are tips to do just that.
- Ensure your report is up to date
- Register to vote
- Pay your bills
- Build your initial deposit
- Consider hire purchases
- Look for a guarantor
- Get away from bad credit
- Be smart
- Avoid unnecessary applications
A credit report shows a history of how you have held money in the past, as well as a representation of what your financial ‘health’ is. An erroneous entry on the report can affect your credit rating/score, costing you the much-needed loan you’re after. One of the best ways to ensure your credit history and info is clean and up to date is by requesting the full report, then looking into each detail. It’s also a good idea to report anything that seems out of the ordinary to the reporting body and have them investigate and correct the error as soon as possible.
Almost every lender in the land will want not only to confirm your credit rating but your name and current address as well. You therefore need to ensure your name and current details are consistent in all records and present in the electoral register. Registering as a voter might work in your favor too.
Are you currently paying back a loan? Keeping up with the repayments and never missing a payment can help boost your credit rating and chances of getting a loan. For most lenders, making loan repayments on time (however small or big) shows you can be trusted, hence will consider your loan application.
Proper budgeting is key to securing your financial health and overall credit status. Although you might not know this, banks will dig into your financial history to see how you spend your money and how often you borrow when processing your loan application. So, watch your spending and at least save enough for the initial deposit.
If you’re getting a car, for example, the lender will want to know how much you will be putting down in deposit for the vehicle. Depending on your credit score, most lenders will require you to have at least 10% of the borrowed amount for the deposit. Saving up more than 10% can help sweeten the deal on the lender’s side, improving your chances of having the loan approved.
If unable to secure car financing with any lender, you could try your luck with hire purchase. There are options for bad credit van leasing, for example. This option allows you to have the vehicle and make payments, while the financing company holds the logbook until the loan is fully repaid. It is after repaying the loan that the ownership will be transferred to you. Most lenders tend to like this option simply because the car will be used as collateral should you fail to pay.
Have you been trying to secure a loan but in vain? Is your credit rating making it almost impossible to get finance? If yes, someone with a better credit standing might be able to bail you out. He/she, however, needs to be someone with lots of trust in you. You can ask him or her to sign as a guarantor for your loan. Most lenders will willingly grant a guarantor loan knowing the guarantor will pay the loan should you not be able to. The guarantor needs to be financially stable to pay the loan if the worst happens.
Although you may not know this, having a financial link with someone with a bad credit rating hurts yours as well. Take a moment to evaluate all financial associations you might have and check to see their credit standing. De-linking yourself from these (e.g., joint bank accounts, shared mortgage, etc.) might help your credit score in the long run.
If you’re smarter with your money you then have more flexibility to improve your credit history. By having more to play with you can pay more off your loans, need to borrow less and have a better financial record. This can be started with little things such as bringing your own lunch to work, skipping on that extra shop bought coffee or making your own way to work and not paying for public transport. All of these things will help you save.
Applying for more loans than necessary over a short period raises a red flag with lenders. Most lenders see this action as someone struggling with finances, hence will most likely deny your request. It also wouldn’t be advisable to apply for two or more loans within two months, as the lender will make a ‘hard’ pull of your credit history, pulling your score down farther.
Use a loan eligibility checker to see what financial options you have without it reflecting on your credit history. Simply enter your details and hit submit to see what options are available.