Some people do not even realise there is such a thing as a credit rating. It can be a shock to also discover that your rating is below average or even bad.
Having a bad rating can affect your ability to obtain loan approval. You may also be hit with fees and a higher interest rate. If you have checked your score and want to make it better, the following are seven steps to follow to help you improve your credit score:
1 Go through your report thoroughly and make sure there are no mistakes
If you believe there is information in your credit report that is incorrect, it is important you contact the relevant credit institutions as soon as possible. You must then contact the credit reporting agency and provide any documentation that supports your claim. Resolving these errors will help you improve your credit rating immediately. Furthermore, if you believe you are the victim of identity fraud, you must also contact the police as soon as possible.
2 Set up direct debit payments for all your bills
If you know you are poor at keeping up with due dates, setting up direct debit payments will solve this problem. If you are setting up the payment from a savings account, ensure you have ample funds in your account to pay for you bills.
3 Add good information to your credit report
Once you go through your report, if you believe there is good information missing, you can ask to have the information added. This would be details such as having a long term employer or being with a financially secure partner.
4 Consolidate your debts
If you have defaulted on a loan or have payments overdue, this information may be in your report and unfortunately, there is nothing you can do about it.
If you are struggling to make all your repayments, you can consolidate your debts to help prevent future black marks against your score.
5 Give it time
All of the information listed in your report will have a date listing how long it will remain on your file. Some items are removed after 5 years, while others may only be there for a few months. If you apply for a loan and are unable to get approval because of your score, it could be worth waiting until some or all of the items in your report have lapsed. In the meantime, continue to pay all your bills on time, reduce excess spending and save as much money as you can. Also, keep a watchful eye on all of your accounts; keep all of your passwords secure and use two-step security verification to protect them against fraud.
6 Do not automatically apply again
If you apply for a loan and are rejected, it’s important that you don’t immediately apply again. Too many applications could negatively impact your score further. Instead, if you are rejected, check your report (if you haven’t done so already) and see if your score was the reason for the rejection. If you have a low score, follow the previous 5 steps to try and push it up before you apply again.
7 Contact a professional Credit Repairer
In cases where you need some more assistance, consider taking on a credit repairer. They will be able to help you contest any discrepancies your find in your credit report.