Credit scores are a tricky thing. We’re often told about what damages them (missing repayments, for example), but what can you do to increase your credit score? We’ve put together seven of the best tips to get your score as high as possible.
Registering to vote is important from a democratic standpoint, but it’s also helpful to the people you borrow money from. Being on the electoral register is a good signal to potential lenders that you’re actually living at the address you've given them, which makes you look less risky.
Even if it is just down to circumstances, moving house and switching banks can make it look like you’re trying to run away from something… like somebody who previously lent you money. Creditors want to lend to people that look low-risk, and staying at the same address and using the same bank suggests that you’re stable and secure.
Keeping your ‘credit utilisation’ as low as possible is a really good signal to organisations like credit card companies, and loan providers. If you can stay below 20% of your credit limit, it shows that you’re not dependent on borrowed money. Some people find it difficult to keep their credit utilisation low however, so if you think you be tempted it could be a good idea to refuse that next credit limit increase.
This is an obvious one. A good history of paying companies the money you owe them, on a regular basis, on time shows that you can be trusted. Things such as utility bills, council tax and phone bills all count towards this, and if you miss a payment a mark could be put on your credit file that badly damages your credit score.
Mistakes happen, and that can go for companies that lend you money too. Keep an eye on your credit score with tools such as Experian and Clearscore, and get used to what it looks like. If you notice a sudden change in your score, or see something in your file that shouldn’t be there, get it sorted out as quickly as possible to avoid damaging your score.
Using credit responsibly is one of the best ways to improve your credit score. Take a look at credit-building financial products, for example certain credit cards, new savings products like LOQBOX or even a Creditspring membership. You don’t have to spend a lot of money to show you’re trustworthy – even paying back a credit card in full each month can help.
Don't keep an account open with people you’re no longer living with, and avoid sharing bills with people who can’t pay them on time. The people you share financial responsibilities with can affect your credit score, so don’t share an account or bills with people who aren’t as financially organised as you are.