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Why is it so important to have a good credit score? Well if you are like most of us, you will need to turn to some sort of finance to buy that car you’ve been dreaming off, or to purchase your first property, take out car finance or maybe you just want to take out a personal loan, you will need a good credit rating.
Whoever you apply to to obtain finance, they will always check your credit score to see how reliable you are and how likely you are to make the repayments.
No matter what you are looking to finance, having a good credit rating will open the doors to a range of financial options. Most of us aren’t even aware of what our current credit score is, or how we can improve our current rating. So here are a few simple tips that can help you improve your credit score:
1. Pay your debts.
One of the main reasons for a poor credit score is if you have defaulted on previous debts or have missed many payments. If this is the case with you, finance companies will worry that they will not get back the money they lend to you so you need to take steps to make yourself a more attractive prospect. Pay off as many missed payments as you can. If you are trying to buy a car on a finance plan, you should also try and save up a deposit as this will increase your chances of being accepted and mean that you have to borrow less.
2. Have a permanent address.
If you have moved around a lot in recent years you will have many addresses listed on your credit report, and lenders will probably view you as unreliable. They like to see a steady history and some stability in your life. If this is the case with you might need to delay your application, say by about 6 months to build up time at your current address. Also, make sure you register to vote at your current address and that all your accounts (phone, cards etc) are registered there as well.
3. Build a credit history.
If you are young or you have never used credit before then you won’t have much of a credit history, and this can count against you as lenders won’t be able to judge you. You can improve this by getting a phone in your name, or a store card or other small bit of credit.
4. Don’t apply too many times for credit.
Avoid making too many loan or credit card applications. The reason behind this, is that if you are denied, lenders will be able to see this when they check your credit record, which will reduce your chances of getting approved credit from other lenders.
5. Check your credit record online.
Probably one of the best sites out there is Experian.co.uk which offers you access to your credit report and advice on improving your financial situation.
The more aware you are of your financial situation, and what you can afford to borrow, the easier it will become to manage your repayments. If you successfully receive a loan or credit card and pay it off without missing payments, you will gain a lot of credibility from the lenders and successfully increase your score. This will give you access to borrow larger amounts, but always remember to stay within budget.
Here is another way you can build your credit by making on-time payments with your creditor.
One way I found to do this is through CashCrate. They are a get paid to site where you can make free money online and cash out at the minimum of $20.00. When you become a member and start earning money, visit the Earn Cash Tab at the top of the site and click on "Offers" scroll down the offers list until you find this Offer:
Discover it™ Card
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