As the economy continues to be in doldrums, lenders are becoming very cautious to the people they give credit facilities. Some lenders charge high interest rates to individuals with poor credit rating as a way of mitigating the default risk involved. A good credit rating will definitely boost the chances of getting financial products such as mortgages, personal loans and credit cards from banks and other lending institutions. On the hindsight, a poor credit rating will limit your borrowing options. It is therefore very important to put strategies in place to improve your credit rating. Discussed below are ways you can improve your credit rating:
Always Pay Your Bills on Time
Never miss to make a loan or a mortgage repayment on time because it will affect your credit scores adversely. Paying your bills on time will avoid incurring penalties that could have reflected in your credit file. If you are in a fix and cannot make to pay your bills on time, talk to your lenders as early as possible.
Cancel All Expired Credit Cards
Most individuals switch cards often but fail to cancel old credit cards even if they no longer use them. When you do not cancel these cards, they still appear on your credit file. This will affect your credit rating negatively. It is therefore recommended that you cancel all the expired credit cards and have this information logged on in your credit file.
Check Your Credit Report Regularly
Ensure that you check your credit report on a regular basis semi-annually or annually from the main credit reference agencies which are Equifax and Experian. Checking your credit file will only cost you £2 but it is worth it because you will ascertain that the information on your credit report is accurate and up to date. Not all lenders that inform credit reference agencies of all changes that happen in your account right away and therefore you will have the opportunity to ensure that they have the updated details. It is also good to keep a close look for charges in your credit file which may be caused by identity theft or duplicate entries of unpaid balances. If you notice something amiss in your credit report, you should have it rectified immediately to ensure that you have the right rating.
Always Give Correct Information
Ensure that the information you supply on your loans, mortgages and credit cards applications are truthful and accurate. Inconsistencies of information provided will negatively affect your credit rating and may even be considered as a fraud.
Avoid Too Many Enquiries on Your Credit Report
When you are scouring for loans, ensure that lenders do not make equerries about your credit report without your knowledge. Lenders should only access your credit report when you have requested them to do so. Multiple credit checks within a short time spun can affect your credit score since it can imply that you are so desperate to get as much credit as possible even if you are not in a capacity to service all the credits.
Controlling your credit card expenses will also help to improve your credit rating. Aim to maintain your credit card balance at less than 25 % of your overall limit. Whatever the method of improving your credit score you employ, ensure that you are consistent.