Among several financial pearls of wisdom, including “save on a rainy day” and don’t spend more than you can afford, there is also invaluable advice to “keep your credit score high.” A good credit score can unlock a number of benefits and savings, as well as access to credit cards and loans when needed.
Your credit score reflects your reliability in repaying your money, and this score is calculated based on your financial history and how it was managed.
The higher your credit score, the more likely you are to take out loans such as mortgages, cash loans, and credit cards, at the best rates.
James Jones, head of consumer affairs at Experian, told Express.co.uk: “The credit score is taken into account when the lender decides whether you are accepted and, importantly, what rates are then offered.
Experian, a credit information provider, recently conducted a survey that found that 47 percent of consumers believe they will secure the best rates on loans, but in reality, the highest rates are usually provided to only 51 percent of successful applicants.
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Mr Jones continued: “Interest rates are usually tailored to individuals and their circumstances, including their credit score.
“Similarly, at a time when people are facing higher prices due to increased living costs, engaging in your credit score can be a key step in understanding your personal finances and ensuring that you are planning for the future.”
With that in mind, Mr. Jones has provided six key ways you can improve your own credit score and gain a better financial position.
1. Know your score
It is recommended that you first check your current credit score.
Mr Jones said: “This can be done in minutes by registering with them directly, such as the free evaluation service on the Experian website, or through third parties such as ClearScore and Credit Karma. All services will contain useful tips and advice. “
Next, check the information in your credit report to make sure it reflects the facts.
Mr Jones said: “Release any credit applications you make and make purchases using eligibility services.
“This way, you’ll only be asking for the bids you’re likely to get, and you’ll avoid collecting more ‘hard’ search tracks, thus protecting your score.”
Money Saving Expert offers a great “soft” search tool that allows you to check which credit cards you might be eligible for without affecting your score.
4. Consider maturing your credit history
Mr Jones said: “While it makes sense to shop from time to time to make sure you get the best deals, your credit score will help you if you let some of your credit accounts mature.”
For example, if you hold the same credit card for five years, it can add 20 points to your Experian Credit Score.
Mr Jones said: “Experian Boost does a number of things, including regular council tax payments, savings and digital streaming services such as Netflix and Spotify.
If this analysis provides a strong payment history, Experian will immediately apply the calculated increase in your score.
Mr. Jones continued: “Boost will never cause your score to drop and about two-thirds of customers will see immediate improvement.”