Improving your credit score is essential if you happen to have come across some money problems. You will need a good credit score for a house mortgage, to take out a phone contract, to get access to loans and there will be many other advantages to keeping your credit score high. Here are our top tips on how to improve your credit score.
In emergency circumstances, you can go for a loan
There are options to get a payday loan if you are waiting to get paid at the end of the month or you’d rather pay off some debt in one lump sum. It’s only recommended if you are in an emergency situation and you have no other option to access some money you really need.
Paying your bills on time is crucial for a good credit score
It is really important to pay your bills on time if you want to improve or keep your credit score high. Missing a payment will lead to your credit score dropping and it can be difficult to get it back up once this has happened. It isn’t very difficult to organise standing orders with your bank so you will unlikely miss a payment, the bank will set up the direct debit for you so you don’t need to remember to do anything. The main thing is having the money in the bank for the bill payment to come out.
A top tip is putting all your bills money aside as soon as you get paid, this ensures you will have enough to cover the payments. If you aren’t very good at managing your money, you can learn to pay the essentials first and then divide the money you have left into a weekly budgeting system. If there are some bills you can’t afford at this point in your life, you can always try to lower them, for example, you could decide to go for a cheaper phone contract or stop using so much electricity in your house.
Make sure you limit your requests for new credit
It isn’t a good idea to apply for new credit cards, mortgages, or auto loans, these are termed as ‘hard inquiries’ and can affect your credit score negatively. If you do need to apply for a loan, for example, a one-off application shouldn’t affect your credit score too much if it is occasional. It’s important to only apply for these types of inquiries if you really need them and you think you will be eligible. Just remember not to apply for too many of these over a short space of time. It is best to avoid applying for new credit as banks might assume you are in a bad financial state and won’t want to lend you loans, mortgages, or grant you any other benefits.
Now you know the best ways to improve your credit score, you can try your best to do these and you will see it gradually getting better and better. Small improvements over a long period of time will give you a consistent credit score or help it get higher so you can reap the benefits.