improve your credit score

6 Tips To Improve Your Credit Score

Looking to improve your credit score?

Credit scores are no longer just about whether or not you can take out a mortgage on a house, get yourself a credit card, or be approved for a personal loan.

Nope, credit scores also affect your ability to sign up for phone contracts, cover your car with monthly insurance, or even take advantage of high-interest bank accounts.

Therefore, it’s fairly obvious, your credit score needs to remain squeaky clean.

If not, life is going to become dramatically harder.

A bad credit score will affect your ability to get a various range of loans approved, you may find it difficult to be approved for housing rentals, and you may even be denied some job opportunities.

The question is then, if you’ve previously had bad credit or simply wish to improve your credit score, how do you achieve this?

Well, read on, as this is what we are going to explore in this article.

What Is A Credit Score?

For those that are unsure, a credit score is formulated from information that is lodged in your credit report or credit file.

Typically, your file will include:

  • your personal information,
  • previous credit applications,
  • late or missed payments, if any,
  • if you have any financial links to other people (joint bank accounts, joint mortgages, other loans, etc.)
  • current money you owe to other lenders, if any,
  • or if you have previously claimed bankruptcy.

The information held within this report is used by lenders to decide whether:

  • to lend to you, 
  • how much to lend to you,
  • and how much interest to charge you.

It is important to note that the most recent information on your credit score will have the most impact on your borrowing ability. However, your financial decisions from up to 6 years previously, good or bad, will still remain on your record for lenders to view.

So, how do you improve this score?

Let’s take a look.

1. Amend Any Mistakes That Are Currently Plaguing Your Credit Score

Having incorrect information stored on your credit report can be very damaging to your credit score, therefore, it is obviously within your best interests to have this information amended.

You can do this from a number of different avenues, the easiest is to use the services of a credit score checker company. These companies will allow you to check your credit score once a year free of charge. If, however, you wish to obtain a copy of your credit score more than once they will likely charge you a fee.

From there, you will have to contact any lenders that have mistakably put a negative mark on your credit score.

2. Use Your Credit Card Regularly But Responsibly

Using a previously approved credit card in a responsible and frequent manner is an easy way to improve your credit score.

Keeping your credit card active, by frequently using it on small purchases and paying off the end of month bill on time, will make you appear much more attractive to lenders. 

This will, in turn, improve your credit score as it demonstrates your ability to pay back the money you borrow in a timely and reliable manner.

3. Avoid Making Multiple Credit Applications Within A Short Period Of Time

When applying for credit a mark is left on your credit report. If you make too many of these applications, particularly in a short period of time, it may negatively impact your credit score. 

Lenders don’t want to borrow money to people who are consistently rejected for credit. It shows a lack of confidence in your ability to pay back money that is lent to you. Therefore, if your application for credit is rejected, it is a good idea to allow a period of cool down before you apply again.

If necessary, utilize those credit checker companies to make sure your credit isn’t being affected by rejected applications.

4. Put Your Name Down On A Few Utility Bills

Utility bills, electricity, water, phone or internet services, all count as forms of credit. Credit that demonstrates you are able to pay bills on time showing lenders you are a reliable borrower.

This is an easy way to increase your credit score and will boost your chances that lenders will trust you with credit in the future.

5. Keep An Eye Out For Identity Fraud

Identity fraud is becoming a big issue, once it was uncommon but now, with your information being stored online in multiple locations, it has become a serious threat to your credit score. If someone does happen to get hold of your detail, they could potentially damage your name and possibly affect your chances of being approved credit.

To avoid this, again, check your credit report frequently. 

And if you happen to notice anything suspicious?

You should immediately report the fraudulent activity to your local authorities.

6. Register To Vote

Depending on where you live will affect if voting is mandatory. If you live a country where voting isn’t mandatory and you aren’t already on the electoral roll, it’s a good idea that you sign up as it is much harder to get accepted for credit if you are not.

This is simply because it is much easier for lenders to identify you and check your credit score if you are on the electoral roll. The easier lenders can check your credit and gain access to your information the more likely they are to lend you money.

Conclusion

Do you know another great way to improve your credit score?

By keeping on top of your finances. That way you’ll never miss a due date for utility bills, you’ll always have plenty of money to pay your monthly credit card balance, and you also won’t have to borrow large amounts of money, reducing the risk your credit applications will be rejected.

And what’s a super-easy way you stay on top of your finances?

To employ the help of Emma, of course.

Emma is a money management app that will help you keep on top of your monthly budget. She will help you take control of your finances, check your credit card balance, keep your unnecessary purchases in check, highlight any sneaky banking fees and track debt repayments.

Emma is available for download on both the App Store and Google Play Store.

Edouard Daunizeau

I look after all things Growth here at Emma. I come from France and have spent the last few years scaling consumer tech startups in the UK and beyond. 🚀