Improve your prospects by improving your credit score.

We all make financial mistakes when we’re young. Some of us are lucky enough to avoid that happening, but for others the consequences later appear in our credit history. If you’ve ended up with a fairly mediocre credit score – or even bad credit loans are hard to come by, but it’s not the end of the world. There are smart steps you can take towards a better credit score every day.

Pay off a little bit of your debt

Did you know that if you’re using more than 75% of your available credit then you’ll generate a red flag on your credit score? Anywhere between 50% and 75% usage and you’ll get an amber flag. Sure you might think no credit check loans are a good option but you’ll pay extra interest for the privilege. So if you’ve currently got debts and you want a way to improve your credit score then try to repay them so that they sit just under 50% – even if it’s exactly 49.5%. Because if you can show you’re using less than half of your available credit, your score will immediately go up.

Check your file for mistakes

There could be a very good reason for a lower than average credit score – or it could be a mistake. Even banks and credit rating agencies don’t get it right all the time so you need to police your score yourself. Everything from address details through to incorrect default reports can improve your credit score if corrected or removed. If you’re regularly checking your credit score you’ll also be able to keep an eye out for fraudulent activity, which could leave your credit decimated.

Stay where you are

Want to build up a history of stability in the eyes of a lender? Then stay put for at least a couple of years. People who move around a lot make lenders nervous and this can also drag your credit score down. Stay in one place for as long as you can to start building a better and more positive credit record.

Try a credit builder credit card

When you have a bad credit score it can be very difficult to get a new loan or credit card. The more you try, the more you’re rejected and every rejection ends up pushing your credit score further down into the doldrums. It can be a vicious circle of bad credit that’s hard to escape. However, it is possible to get out of this rut with something like a credit builder credit card. Bear in mind that interest rates tend to be high with this kind of card. However, if you don’t max it out and you pay off your balance every month you’ll escape the worst of the cost and start improving your credit score dramatically.

Set up some regular payments – and keep them up

From direct debits to rent payments, you can achieve positive change with your credit score simply by organising your financial affairs – this is also a great way to get into good habits with your money. Crucially, you must keep up all the repayments or you could end up negatively affecting your score even more.

 

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