How to improve your credit score
Before you start thinking about how to boost your credit rating, it is important to understand exactly what it is and how it is used.
Banks and other lenders look at your credit score when they are deciding whether to agree to any application to borrow money – this could be in the form of a loan or credit card, or if you are buying a new mobile phone contract.
There are three main credit reference agencies in the UK: Experian, Equifax and TransUnion. They hold data about your financial history, such as any debts you already have, which is known as your credit report.
This report is then used to generate a score to show your creditworthiness. Each reference agency has its own numbering system but the higher the score the better, and the more likely you are to have your loan application accepted.
Your score could also have an impact on how much money you can borrow and what rate of interest you are charged for it.
Read the report that each credit reference agency holds on you to make sure they are correct as mistakes could lower your score.
They typically offer several ways, free and paid-for, to check your record. You can go to their website and request a free copy of your statutory credit report.
There are several options for seeing your score for free. MoneySavingExpert’s Credit Club lets you access your Experian score. ClearScore will give you a score based on information provided by Equifax. Subscribing to Credit Karma lets you see your TransUnion score.
Paula Roche, the managing director of consumer solutions at Equifax UK, says: “Contrary to popular belief, checking your credit report will not change the score itself, so there’s no harm in taking a look, and it can be extremely empowering.”
Common mistakes include having the
Read more on theguardian.com
