Your credit score is something that, if you are looking to make a big purchase in life, is critical. The problem is that most of us have no real understanding of our credit scores. That is until it makes an impact on our lives, like when making a big purchase like a mortgage or a car. So ensuring you know how to improve your credit score is critical.

Thankfully, it’s partly about a little bit of understanding what contributes to good credit and identifying the things that are having a negative impact at the same time. If you haven’t always been one for making smart financial choices then it’s good to know your credit score and work on improving it. There are some silly mistakes that can ruin your credit score, so make sure you check on it.

Let’s show you some simple ways to get back on track. 

How to improve your credit score

Pay your bills on time

It sounds so obvious, but if you are not paying your bills on time this is going to have a negative impact on your credit score.

While bad credit can be rectified in terms of big purchases like a mortgage, it is important to understand that if you are getting advice from an expert because you have bad credit and you need a mortgage, paying your bills on time is one simple way to strengthen your score. 

Paying your debt

Experts recommend that you should use no more than 30% of your credit limit at any point in time. For example, if you’ve got a credit card that is maxed out at £1,000, you would need to pay off £700 in order to have that “credit utilisation rate” of 30%.

This is a very simple way of explaining it, but if you’ve got other forms of debt doing some number crunching and trying to get your credit utilisation down to a place under 50% will get you started in the right direction. 

Check your credit score

You need to know what is hurting your ability to apply for mortgages or car payments. Your credit score will show you how long you’ve been using credit, what credit accounts you’ve opened and closed, your payment history, and a lot more!

There are plenty of credit score providers out there to get you started which will also show mistakes on your credit file, for example, your address history. Registering to vote by putting yourself on the electoral register is a very simple thing that can help before when applying for credit.

There are a number of other little ways that can help you. Like being aware of past joint accounts and making sure anything you don’t use is closed. This goes for credit cards and even phone contracts! 

Avoid multiple applications

When you’re applying for anything like a mortgage, this will result in a “hard” credit search on your file.

There are many ways of getting “soft” credit searches, but if you are applying for a variety of things like mortgages and cars, having too many applications in a short space of time could show lenders that you are struggling. There are ways around this, for example, when you are comparing rates, ask for a quotation search instead of a credit application search, as it won’t show on your credit profile.

When you are buying a house your credit score is critical. Knowing how to improve your credit score is vital before you start applying for life-changing purchases.

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