Never borrowing guarantees you’ll have a perfect credit rating when you do actually want a loan, right? Actually the opposite is true – you need to show lenders you can be trusted to pay them back on time. If you don’t technically need to borrow cash, it might be worth popping your big shops on a credit card and paying off the balance in full every month to boost your rating.
One of the quickest and easiest ways to improve your credit rating is making sure all your information is up-to-date on the electoral roll. If you’re not on there at all, you may struggle to get any credit as lenders use the information to help confirm your address and ID. To solve this problem in a matter of minutes, just head to Aboutmyvote.co.uk.
We’re always told to compare the best financial products, but the credit rating system is actually a bit anti shopping around. Too many applications for credit in a short period can have a negative impact on your rating. If you’re shopping around for quotes for loans or credit cards ask lenders if they can do a ‘soft search’ which won’t be visible to other lenders on your credit report.
It’s a common myth that people who live at the same address as you, or even the previous occupants, affect your credit rating. But don’t panic, the only people who can impact your credit rating are yourself, and anyone you have a financial relationship with i.e. someone you have a joint account or a loan or mortgage with.
Lenders will check the scores of anyone you’re financially linked to as well and may decide that their circumstances affect your ability to pay them back. So even if you only have a joint account with your flatmate for your rent, their unpaid credit card could have a negative impact on you. If you do have any joint accounts with someone you are no longer financially linked to, make sure you consider getting removed from the accounts and if you do then write to the credit reference agencies asking to be disassociated.
You may have enough sat in the bank to pay off all your debts, but that doesn’t mean you’ll have a good credit score. Only credit products appear on your report so details of any savings and investments and your salary aren’t on there for lenders to take into account.
Find out how to build up your credit rating.