Written by Michael Foote, Insurance and Finance ExpertMichael Foote is the founder of Quote Goat and has over 13 years experience working in the finance, insurance and currency sectors. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city for a number of firms including HSBC.
We all have that one friend with a credit score of 999, who boasts about their ability to get whatever credit they want, whenever they want it. Feeling a little green because you struggle to get credit? Don’t worry, because you are not alone!
If you are stuck with a low credit score, don’t worry because bad credit is more common than you might think – studies show that more people have lower credit scores than higher ones. So there is no need to feel embarrassed or ashamed of your low credit score and inability to get credit, at one point or another most people have been where you are now.
The good news is that regardless of how low your credit score is, there is light at the end of the tunnel. A bad credit score can be repaired; yes it will take time and motivation, but it is doable. The most important thing to remember when it comes to boosting your credit score is that quick fixes aren’t the best route to take, it’s much better to take the slow and steady path.
So bearing that advice in mind, what can you do to see your credit score soar? Read on for all of the best tips and pieces of advice.
Study your credit report
The very best piece of advice that we can give you is to study your credit report. Using Clear Score or Credit Experian, take a long, hard look at your credit report. Don’t focus purely on the number, take the time to read what the report itself says. You can gain a great insight into your credit score and what the problem is with it by studying your credit report – you can see what’s taking your credit score down and what is helping to boost it. You may also find it helpful to use resources, to learn more about the best methods for repairing your credit score. It isn’t always easy to repair your credit score, but it is doable, it will just take time, that’s all.
Reduce your debt
Being in debt can be severely detrimental to your credit score. We say ‘can be’ because it depends on the type of debt. For instance, having a payday loan to pay back or being in an unplanned overdraft will damage your credit score. Whereas having a credit card that you use each month and then pay off, will help to improve your credit score. It’s important to understand what debt is bad debt and which debt is good debt, such as a mortgage for instance, as long as you keep up with your monthly payments, it won’t impact your credit score.
Ensure bills are always paid on time
One of the worst things that you can do which damages your credit score is not paying your bills on time. Every time a direct debit payment bounces or a bill is marked as late, it impacts your credit score. The best thing that you can do is make sure that bills are always paid on time, or if you know a payment will be late, contact your provider in advance to see if they can move the payment for you. Often, when you call up and ask in advance, providers tend to be more accommodating.
Improving your credit score is no easy task, but the fact is that if you take note of the advice above and are patient, you should slowly start to see improvement, and soon enough your score will be soaring which will make it easier when applying to borrow finance like a mortgage.