How to improve your credit score: Bust myths & improve your rating
I am going to cut to the chase as fast as i can with this article and offer advice on how to improve your score and bust myths so you can completely focus on getting a better rating. But first, just to cover all bases i will explain what a credit score is and where to check your current score.
Improving your credit score (also known as a credit rating) is important because it will affect your ability to borrow money or access products such as loans. Furthermore; the better your credit score, the more lenders will be attracted to offering you a loan, and thus in this case the better deal Car Finance Deals can offer you.
What is your Credit Score?
Your credit score is created from information held in your credit file. Your credit file is a record that shows how responsible you are with your repayment of debts. And then your score comes from this file as a numerical expression based on a level analysis of your credit file; to represent the creditworthiness of you.
Why is your Credit Score important?
The information held on your credit file will be used to decide whether the finance company will lend to you. Going further, even if you are approved, a poor score will result in less money the lender will borrow you and more interest they will charge, as they will see you as a greater risk. This is why it is absolutely so important you should never miss any debt payments. It can have a dramatic affect on your earnings in the long-term. The most recent information on your credit file will have the most impact, as lenders will be interested in your current financial situation. That said; your file will have at least six years of your previous activity on record. We would advise you to check your report often, because if can help you spot any mistakes on your file and to spot any fraudulent activity which maybe harming your ability to lend.
How do i check my credit score?
You can check your credit score by using many credit agencies, some are paid for services and some are free. You can request full details of your credit file or simply get your score online. Four of the most popular websites in the UK are listed below. Click on each to go directly to those websites:
What you will see in your Credit File
In general your file will include;
Name, address and date of birth.
How much money you owe to lenders.
Any late/missed payments or defaults.
Any CCJs (County Court Judgements) against you that are not paid in full within one month of receiving the notice.
If you are entered into an IVA (Individual Voluntary Arrangement) or have been declared bankrupt.
Busting Credit File Myths
There is no such thing as a blacklist or uniform credit rating.
Your score is not actually on your credit file, this is because the score varies depending on which credit agency you are checking your file with.
It is important to understand what lenders know and dont know about you; so you can make sure you have the best credit file possible;
What lenders know (data shared on your credit file)
Past dealings you have had with the lender
Electoral roll information
Search, address and linked data
Bank Account(s) data
Some history from utility providers
and the application form (in this case, the one you use when applying for Car Finance: https://www.carfinancedeals.com/apply)
What lenders don’t know (data not shared on your credit file)
Council tax arrears
Parking or driving fines
PPI, CPP, bank charges and other reclaims
Race, religion, ethnicity
Child Support Agency payments
How to improve your Credit Score
Make your payments on time. Never miss or be late on any credit repayments.
Use a credit card little and often.
Pay for your insurance(s) yearly rather than monthly.
Register to vote or it’s much harder to get credit.
Don’t withdraw cash on credit cards.
Don’t let your partner or flatmates score damage yours. Keep your finances separate.
Stay away from Payday loans; they can kill applications.
Never pay for a credit repair company.
Avoid making multiple credit applications in a short space of time.
Cancel unused credit and store cards.
Fix mistakes on your report.
Reduce your debts with savings, doing this can save you more money in the long run.
How long it will take to improve your Score?
It depends on a number of things, but you should know it won’t happen overnight. Credit history is built up slowly over time as you increase the number of on-time payments you make. So keep making those payments on-time and you will ultimately get access to more offers; higher credit limits and lower interest rates.