Some key things you can do to improve your credit file are quite simple to achieve, but please note whilst some will have an impact immediately credit files typically require time to improve and won’t happen overnight.
Other than the obvious thing of paying the debts you have on time. Below are some fundamental things you can do to improve your credit score.
Register to vote
Being on the electoral roll is a way that you can be electronically identified as resident at a particular address. Being registered carries points towards your score, so unless there is a particular reason to not be registered- make sure you are.
Have some active credit
Having a mobile phone contract and a credit card with a low limit that is used and paid off monthly is a great way to demonstrate credit worthiness and build your score. However, ensure that anything you take out is set up to be paid on a direct debit and that the payments are made on time. Too frequently people forget to make payments when they are required to be done manually, and this will cripple your efforts to improve your credit score and have the completely opposite effect of what you are trying to achieve.
Reduce available credit
If you already have lots of credit cards, whether they have credit balances or not it is best to reduce these down. This happens a lot when people balance transfer by opening a new card facility and do not close the facility that they have transferred from. Over time large available credit facilities are created, and this can actually reduce your score, and make lenders nervous.
Try not to move around a lot
We don’t mean sit still! However, having lots of addresses in a short period of time will reduce your credit score. The score improves with consistency, and therefore ensuring that you have as few addresses over the last 3 years as possible is ideal for improving your score. Whilst multiple addresses will not automatically mean a decline, it is a factor when determining your credit score.
Keep your bank accounts in good order
Your current account activity will be a factor of your credit scoring, so staying in credit, or at worst within an agreed overdraft limit is critical. A healthy flow of cash through the account that ends in a net positive gain each month will benefit your credit file.
Each and every lender will have their own internal scoring system we have seen people with perfect scores on Experian or Equifax be declined by a lender because their available credit was too high across their credit cards based on their earned income.
Your home may be repossessed if you do not keep up repayments on your mortgage