REGISTERING your credit score can give you a better chance of getting the right mortgage or loan.
Credit rating expert James Jones has revealed quick tricks that can take as little as half an hour to sort out but can have a lasting effect on your score.
Your credit score is an important piece of financial information that lenders use when reviewing applications for products like loans, mortgages, and credit cards.
Scores are compiled by credit reference agencies such as Experian, Equifax an TransUnion.
These companies aggregate information based on your financial history and how good you are at paying off credit cards like mortgages and credit cards.
Each reference agency has its own scoring system based on your financial data and how well you are managing your debts.
Ratings are usually from poor to good, very good or excellent.
In the end, people who pay their bills on time get the highest scores, but this number can also be affected if there are errors in your reports or by other factors, such as if you make a lot of money. credit application.
Lenders will use this data and your score to decide if they are comfortable lending you a loan and how much interest they will charge.
A bad score, for example, if you’re late on your payments or go into bankruptcy can hurt your score and linger on your credit report for six years.
But Jones, head of consumer at Experian, says there are quick and easy changes you can make to boost your credit score and increase your chances of getting affordable financing.
He told The Sun: “Elevating your score even on a single range of scores, such as fair to good, can give you access to a wider selection of credit products and, importantly, at a lower level.
“So spending a little time on your credit score now can pay good dividends in the future.”
Check your report
Jones recommends monitoring your statements regularly so you can spot any errors, such as if a loan is shown as unpaid or if your address is wrong.
It will list all the bank and credit accounts you have so you can see if there are errors and contact a credit reference agency to correct them.
Equifax allows you to check your score and report free for the first 30 days, then £7.95 a month.
TransUnion’s Credit Karma Service gives you free access to your reports and scores for life.
Each reference body will have different data and scoring systems, so you should check them all as you won’t know which one your bank is using.
What does Experian’s credit score mean?
EXPERIAN credit scores range from 0 to 999, here’s what each score means.
Very poor: 0 – 560
Poor: 561 – 720
Fair: 721 – 880
Good: 881 – 960
Excellent: 961 – 999
Register to voter list
Registering to vote may have nothing to do with your finances, but it’s vital to your credit report.
It helps banks verify your identity when reviewing credit applications, and Jones says it can boost your score.
“Your credit report includes voter registration records to help lenders confirm your name, address, and residency history,” he explains.
“Registering can increase your Experian credit score by around 50 points, and you can apply very quickly via your local council’s website. The information is usually delivered to your credit report within about an hour. month.”
Find out where to Register to vote at Gov.uk.
Reduce existing card balance
Lenders want to see proof that you can manage your debts and may be concerned if you are consistently near your credit limit and appear to be dependent on cards and overdrafts.
Jones says keeping your card balance to no more than 30% of each card’s limit can raise your Experian score to 90.
“Lower balances show that your lenders aren’t too dependent on credit,” he said.
“If you have some money left over, paying off your existing balances can give your score a welcome boost.
“Remember that this type of information is refreshed on your reports once a month.”
Set up direct debit
Jones warns that a missed credit card repayment could drop your 130 points.
It only takes a few minutes to set up direct debit through online banking to pay your bills each month.
This will ensure you can automatically clear your balance without having to remember it every time a credit card bill arrives.
“Manual monthly payments on loans and credit cards can make you feel more in control of things, but forgetting a regular payment and your credit score can plummet,” says Jones.
“One recent missed payment can reduce Experian’s 130 points. I recommend setting up direct debit for all your regular payments to avoid future hiccups.”
Breaking financial ties
Any joint accounts you open with a partner will show up on your credit report and link you together financially in the eyes of the lender.
This means that even if you are no longer together, the other person’s credit history can affect your application if the account remains open.
Jones suggests submitting a “financial unlink” on each of the three major credit reference agency sites, which will take a few minutes and will break any financial links on the report. your.
Sign up for a boost
Paying off your debt on time can boost your score, but that can be difficult if you haven’t had a credit card for a long time or you’re renting so don’t have a mortgage.
There are ways to boost your score by showing you can pay off other contracts on time.
Experian has a Boost service that Jones says can boost your credit score by 101 points.
It does this by connecting your bank account to your Experian score calculation and using open banking technology to record payments for council tax, streaming services like Netflix and Spotify and savings accounts.
Renters can also sign up for services like Canopy and CreditLadder to record your rent payments to help boost your score.
Poor credit score can add £262 a month on your mortgage payment but there are ways that you can improve it to get a better deal.
See how paying for Netflix is possible improve your credit score.
Also, Monzo customers can now check their credit score for free on the app.
https://www.thesun.co.uk/money/17387611/credit-expert-ways-to-improve-your-score/ I’m a credit expert and there are six easy ways to improve your score in 30 minutes