There are many ways you can build your credit history and boost your credit score to improve your chances of being approved for credit.
Lenders assess an applicant’s ‘creditworthiness‘ when they receive credit applications to determine the level of risk involved in lending money to the applicant. Lenders will look at credit history and credit scores.
Do not miss payments
Make sure all your bills are paid on time. Missing payments can drastically reduce your credit score and make you a higher risk applicant.
Monitor your credit utilisation
Credit utilisation is the amount of credit you are using compared to your total available credit. Keeping this low shows you are not having to use too much credit and indicates you can manage your money well.
Register on the electoral roll
This can boost your credit score and is one of the first things lenders check. Being on the electoral roll verifies your identity, proves you are living at the registered address, and prevents fraud and identity theft.
Avoid making multiple credit applications
Multiple credit applications will reduce your credit score. This is because lots of credit applications involve ‘hard credit checks’ which show on your credit profile. Having a lot of these in a short space of time indicates to lenders that you have a pattern of applying for loans which could be looked upon negatively. It is better to see if you qualify for a loan using a ‘soft credit check’ instead.
Dispute any errors on your credit report
Review your credit reports regularly to ensure your information is correct and dispute any errors you find.
You can improve your creditworthiness and boost your chances of future credit approval by following these tips. For more advice and tips, sign up for our money tips below.