If your credit score hasn’t been much help to you recently then now is the ideal time to resolve to make some changes. Improving your credit score is easy to do. Small changes make a big difference when it comes to this essential financial calculation and if you don't get to grips with it now you could end up in a situation where you need to find loans for people with bad credit when you have to borrow money for an essential like a car repair bill or new washing machine. And nobody really wants to be in that situation so start making changes now – here's how:
1. Start getting good with your payments
One of the easiest ways to damage a credit score is to miss essential payments. This can happen very easily but it’s difficult to undo when it comes to your credit history. Set reminders to pay bills, cut back so that you always have enough in your account to cover what needs to go out and make sure you know what needs to be paid on which date. Not only will you avoid damaging your credit score by ensuring payments are made on time but you’ll also start to build up a positive payments history. That history is crucial to improving your credit score and showing lenders you’re not a borrowing risk and you will have a better choice of lower cost borrowing.
2. Look for ways to manage your balances better
If you’re transferring debt from one place to another then the end result is that you’re still always in debt. So, look for ways to start paying off some of those balances. You might switch to an interest free credit card, consolidate personal loans or simply have a lean month so that you have spare cash to pay off some or all of a balance. Reducing your overall indebtedness is one of the simplest ways to improve a credit score.
3. Be careful about new credit applications
Current credit scoring systems can be harsh on people who are shopping around for personal loans or credit cards. A large number of searches against one report could start to drag your credit score down. It’s best to limit these searches to one, short period of time and try to avoid the “hard” searches (i.e. those that are recorded on your credit report) wherever possible. If you already have a lot of debt then it may be wiser to avoid making new applications for six to 12 months so that you have some time between searches.
4. Check your credit history
It’s always worth obtaining a copy of your credit report (this should be easy to get for free) as something as simple as a mistake could be dragging your credit score downwards. If you find a mistake, a lack of information (e.g. former addresses) or that your credit score is still connected to an ex-partner then contact the credit agency and request a correction. They will contact whoever supplied the information for the report to obtain consent to that correction.
5. Stay put for a while
Although it’s not that easy if life is taking you in different directions, avoiding any home moves for an extended period of time can have a positive impact on your credit score. Lenders are always more comfortable if they don’t see too much evidence of transience so aim to keep the same address for a couple of years at a time if you can.
