It’s important that you check and manage your credit score regularly. Why, you might ask? Well, it can affect your ability to borrow money or access financial products such as mortgages, loans and credit cards.
So what is a credit score?
It is financial information held about you on a credit report, also known as your credit file.
Your credit score can differ between lenders. The information held on your credit file might be used to decide:
- If they will lend to you.
- The amount you can borrow.
- The rate of interest that you will be charged.
The most recent information on your file will have the most impact, as lenders will be most interested in your current financial situation.
How to improve your credit score.
One of the best ways to improve your credit score is by getting a credit card early in your adult life and managing it well. This means spending small amounts and paying it off in full each month. Be warned, it can be easy to misuse your card, especially if you work to a tight budget. At Anstee & Co we would recommend that you set up a direct debit to pay the balance off in full each month.
How far back do my financial records go?
Your financial record stays on your credit report for up to six years. Be careful as any financial mishaps can come back to haunt you. Regularly checking your report is a great way to spot any fraudulent activity or mistakes on your report. You can now access these for free.
Remember that it can take years to build your credit profile, but only months to lose it. Maxing out a number of cards and missing payments will see your score fall dramatically.
How to improve your credit score
You can check your score for free on our website and if it isn’t in the best shape try taking these actions.
- Ensure that you are on the electoral register and all the information is correct. Full name and address.
- Pay your bills on time. Paying your utility bills on time is a great way to prove to a potential lender that you are able to manage your finances responsibly.
- Moving home a lot will not help. Lenders feel more comfortable if they see evidence that you have lived at one address for a considerable period.
- Do check for fraudulent activity on your credit report. If something is incorrect, contact the credit reference agency to have your report amended.
- Check if you are linked to another person. Having a spouse, friend or family member’s credit rating linked to yours through a joint account, could affect your personal rating if their credit score is poor.
- County Court Judgements (CCJs). These will have a serious impact on your credit score. If you are having problems keeping up with your repayments seek debt advice.
- Having high levels of existing debt is not good. Ideally you should repay any outstanding debt before applying for new credit. A new lender might be reluctant about lending you more if they can see you already have a lot of credit.
How Anstee & Co can help you.
Applying for a mortgage or remortgage, is often when your credit score becomes important.
Our mortgage and financial advisers are independent offering unbiased advice.
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