If your goals for the new decade include revamping your credit score, you’re not alone. In the current financial landscape, being creditworthy is often a necessity. A blemished report or barren credit history can lead to a range of problems. You might not be able to take out a mortgage, buy a car, or even apply for a mobile phone contract.
A bad credit score can even affect your career prospects and business ventures, not to mention its impact on interest rates and insurance premiums. On the other hand, a good credit score can help you get approved for higher limits, avoid security deposits, pay less interest and more. So, without further ado, here’s how to improve your credit score in 2020.
Register to Vote
Did you know that borrowers who aren’t on the electoral register are less likely to be approved for credit? Whether or not you actually vote won’t make an impact. You just need to register, which can be done via post or the government website. If you don’t want third parties obtaining your information, you can remove yourself from the open register.
Check for Inaccuracies
Whenever you apply for credit, it’s always wise to first check your credit file for errors or signs of fraudulent activity. If you spot any mistakes or events that you’re not responsible for, you can contact the credit reference agency to rectify the issue. Be sure to ask for a notice of the correction, as this will make it clear that you’re not at fault.
Obtain More Credit
The only way to prove that you can take on debt is to do exactly that. Any form of credit will help, be it a mobile phone contract or a clothing store card. Another good option is to take out a personal loan. This can come in handy for paying bills or affording something you’ve had your eye on for a while.
There are many facilities that offer personal loans. You can use a website such as Simple Personal Loans to make a single online application that will then be sent to a number of lenders. This way, you can ensure that you’re getting the best interest rates that are available.
Pay on Time
Late payments are a leading cause of credit score penalties. This includes mortgages, loans, credit cards, and contracts. Paying the full amount on time will contribute to a higher score. Many people find credit cards to be the most difficult debt to repay. However, even paying the minimum is far better than paying nothing at all.
That said, repeatedly paying less than the full amount suggests to lenders that you often spend more than you make. If you have numerous cards with smaller debts, consider consolidating them. This can be done with a 0% balance transfer, which makes it easier to keep an eye on your debts as they’re all attached to one bill.
Avoiding too many applications, ending any negative financial associations and removing any defaults from your credit file can also contribute to a better score. Given the benefits, doing so is definitely a worthwhile endeavour.
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