Re-Building your Credit

Why Improve Your Credit Score

When applying for a loan or a credit card, lenders base their decision on your credit score; having a good credit score increases the chances of getting money, a higher limit credit card, or low-interest rates.

Improving your credit score may take months, but paying on time is often the key to building your credit report. Missed payments will negatively impact your score and is visible on your credit report for longer.

Ways of Improving Your Credit Score

Key ways of improving your credit score include:

• Paying your bills on time and not missing payments - this means you are able to manage credit responsibly; keeping up with your credit cards or phone payments, for example, will improve your credit score.

• Credit builder cards - if you have a poor credit score or no credit history, a credit builder card will enable you to pay each month due to a low borrowing limit, stopping you from going into debt.  

• Limiting your credit use and reducing your debt levels - paying off existing debts means lenders see that you’re managing your credit, whereas reaching your card's spending limit can show you rely too much on credit.

• Pay bills in your name, and review any linked accounts - being married or living with someone who you have a joint account with who has a poor credit rating can affect your score. Joint accounts are recorded on your credit file and the other persons. 

• Registering on the electoral roll - being registered on the electoral roll allows you to prove you are who you say you are. 

• Use soft searches when applying for new credit - lenders often use a soft search to give you an initial decision on whether you may be eligible for their credit card. A soft search is listed on your credit file for 12 months, but other companies can’t see the record, so it does not affect your credit score.

• Check for mistakes in your file - for example, an incorrect address. It is important to check everything is up to date. To correct a mistake on your credit file, get in touch with your lender and Credit Reference Agency to notify them of the error and to change it as soon as possible. 

It is important to keep in mind that there is no quick fix and that it may take months to recover your credit score. Please contact us for further detailed advice on your credit score.