- Why a credit rating matters
- Managing your credit cards
- Rectifying mistakes
- Breaking ties with ex-partners
- Keeping up with repayments
Why do I need to worry about my credit rating?Your credit rating is the most important measure that lenders have to judge your creditworthiness in order to assess the risks involved when lending you money. Having a low credit score can intimidate people and even make them push it into the background and not deal with it. You could be paying way over the odds for any personal loans, credit card deals and even your mortgage when the time comes to borrow money. Pay squeezes and high inflation mean that the average person needs to be getting the best value for credit that they possibly can, so what are you waiting for?
1. Keep credit card balances lowOne of the most important factors that determine your credit score is the ratio of how much credit you are using to how much revolving credit you have available. The ideal figure here would be 30% or lower. It is important to try and pay down balances and keep them low. You could further help your credit score by getting a personal loan to consolidate the balances and get rid of the credit cards that you no longer need.
2. Check your credit rating for mistakesThe information that credit rating agencies hold about you needs to be checked at least once a year to make sure that there are no mistakes. If you see something that causes concern you can contact the main credit rating agencies so that they can investigate and rectify the mistake. During this period, lenders will not be able to see your credit file.
3. Make sure that you are on the electoral rollWhen lenders are checking a borrower’s address they look at the electoral register to confirm it. Any changes of address need to be updated or if you are not registered then it is a good idea to do so. You can contact the register to vote website here. https://www.gov.uk/register-to-vote
What have we learned so far?
- Lenders judge your creditworthiness by viewing your borrowing history through your credit file
- A good credit rating will get you the best credit deals and save you money
- Keep credit card balances low or consider consolidating the debts
- Make sure there are no mistakes on your credit file and correct them if there are
- Keep the information on the electoral register up to date or register to vote if you have not done so