Your credit score has an effect on every aspect of your financial life, from getting a phone contract to getting a mortgage, so it makes sense if you want to ensure you’re doing everything that you can to make sure that yours is looking great. But, while it can take some time to build up a strong credit score, just a couple of financial mistakes could be all that it takes to bring it down. That’s why it’s so important that you are aware of the best strategies to take to both protect and improve your credit rating. Some of the best things to do include
Borrow Wisely
Not borrowing any money at all can have an effect on your credit score because lenders won’t be able to see any pattern of past financial behaviour from you, and you want to show them that you are a responsible borrower. So, don’t shy away from borrowing money completely – get credit if you have to, but make sure that you are responsible with it. So, don’t borrow any more than you can’t afford to pay back and ensure that you repay any payday loans in full and on time.
Be Careful with Credit Cards
Credit cards can be dangerous because when you’re spending on them, it can be all too easy to spend more than anticipated and end up being faced with a larger bill than you expected the next month. So, be sure to be careful when you are spending money on your credit card – a good rule of thumb is to never go more than above 50% of your credit limit. So, if your overall limit is £1,000, for example, don’t owe more than £500 at any one time.
Pay Your Bills on Time
It’s not just your debts that have an effect on your credit score – your monthly bills like electric and gas, water, and broadband can also play a part. So, be careful that you are always paying these bills on time – while being a couple of days late might not get your services switched off, it can be a mark that goes against you on your credit report.
Check for Mistakes
Finally, there are many good reasons to regularly check your credit report. Not only does this allow you to see what you’re doing right and what could be improved, it also means that you can quickly pick up on any mistakes on your credit file and report them as soon as possible. Thankfully, mistakes are rare, but keep your eye out for things like: payments being reported as late or missed when they were not, credit limits being larger than they actually are, and addresses or other personal details being listed wrong. These are all small mistakes but they can have a large, unnecessary impact on your credit score that could even prevent you from getting credit in the future.
When it comes to looking after your financial health, your credit score is right at the heart of things.
