Property News > Five Ways to Improve your Credit Score

Five Ways to Improve your Credit Score

Your credit score will determine the rates of interest you will pay on loans and credit cards. It may even decide whether or not a mainstream lender will be willing to offer you a loan or mortgage. Credit accounts include credit cards, store cards, bank loans and mortgages. Your applications and behaviour relating to all of these is being monitored by credit rating agencies and is used to calculate your credit score.You can start building your credit score in small ways. Mobile phone contracts where you make all of the payments on time, a bank account with an overdraft facility that you never use, and a credit or store card where you pay the full balance every month, for example. These will build a picture of you as somebody who can manage their finances and who represents a lower risk for potential lenders.Once you’ve started to create a credit history here some steps you can take to build and maintain a credit score that lenders will find more attractive.Make Sure you Are on the Electoral RollLenders like to be confident about where you live so they can confirm your identity. Making sure you are on the electoral roll is one of the simplest measures you can take.Be Wary of Switching Credit Cards and AccountsCredit scores are all about history. It’s tempting to switch accounts for a better deal or to transfer credit card debts for a zero percent offer, but each new account could reduce your credit score. A long-term history of well managed accounts will work in your favour. Make sure you close any bank or credit accounts that you no longer use. Multiple credit applications over a short period will be a signal that you may be struggling with your finances. Aim to space new applications at least 3 months apart.Never Miss PaymentsMissed and late payments on loans and credit cards are a warning sign to potential lenders. You may just be forgetful or poorly organised rather than short of funds but all the credit scoring agency will see are the missed payments.Have Available CreditThe gap between the outstanding balance and your credit limit is important. Somebody with a healthy credit profile will treat the limit as being there for unusually large purchases. If you are continually skating close to your credit limit it will look like you may be struggling to manage your finances.A poor credit score can prevent you getting on the property ladder or applying for a new mortgage if you want to move home. You need to start building a good credit score well before you decide to apply for a mortgage.If managing your finances and mortgage payments is causing you stress a quick property sale may help you get straight again. Property Rescue will buy your home quickly, whatever its condition and location. We can even advance you funds on exchange of contracts.

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