Credit scores are important but how can you improve yours? Read on to learn how.
How to improve your credit score
Your credit score is really important and can have a significant impact on not only your ability to get a loan, but the rate you can qualify for (if you need more information on what a credit score is read our article titled “what is a credit score?”).
A key question you will no doubt have is “How can I improve my credit score?”
Here is a list of actions you can take:
1. Pay your bills on time
Overdue rent or utilities bills can stay on your credit file for a up to 5 years so make sure you pay these on time. Set up direct debit or automatic payments via your credit card. If you do run into difficulties call up the company that you owe money to and see if you can work out a payment plan.
2. Don't apply for a loan at multiple lenders
When you apply for a loan direct to a lender you actually can hurt your credit score. This is because an application direct to a lender will often trigger what’s called a hard credit check.
Hard credit checks are a formal credit inquiry and therefore impact your credit score.
If you apply for a loan with lots of lenders you run the risk of seriously hurting your credit rating.
If you need a loan it’s best to start with someone who can provide guidance on which lenders are more likely to accept your current situation. We can help find you a personal or car loan from our panel of over 20 lenders. All without hurting your credit score. Start by filling in our application form now. It only takes 10 minutes!
Also beware of buy now pater later schemes. Some credit agencies are now including these types of loans in the calculation of your credit score. Pay these off as soon as possible. Better still, avoid them altogether.
3. Pay your loans off on time
Make sure you never miss a monthly repayment on a loan. This includes your credit card bill. Missing these repayments will end up hurting your credit score and therefore your ability to get another loan at a competitive rate.
4. Check your credit score is accurate
You can check your credit score for free every 3 months (see our article “What is a credit score?”). Make sure the information in your credit report is accurate. You’d hate an admin error to hurt your credit score!
5. Reduce the amount of credit cards
Having lots of credit cards can seriously hurt your ability to get a loan. Reduce your credit cards to the minimum you need and also reduce your credit card limits to make yourself look like a better risk to lenders.
If you’d like us to find you a personal or car loan from our panel of over 20 lenders fill in our application form now. It only takes 10 minutes!
Importantly, at LendLab we do not do an upfront credit check when assessing your loan application. We do what’s called a soft credit check. Soft credit checks are not a credit application. This means they do not come up as a credit inquiry
The LendLab difference:
We'll find you a great rate from our panel of over 40 lenders
No upfront credit checks
apply in less than 10 minutes
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Written by Michelle Gorsevski