After paying rent or your mortgage, as well as any bills that regularly come out each month, there is usually not much money left to play with. If there is the need to suddenly shell out for a new appliance or car, you could find yourself in financial trouble.
While you should not make a habit of relying on credit, it can help you out in situations that you otherwise could not afford. But how do you improve your credit rating so you can get the best deal on loans or credit cards?
Cut Older Ties
You might not realise that when you apply for credit, the lender is checking both your details and those of any partner you currently have an account, loan or mortgage with. In rare cases a lender’s information includes people who have lived at your address in the past.
With this in mind you must get a copy of your current file to double-check that past history is not still affecting you. This also counts for past credit cards – if you no longer use an account, you might want to cancel it so that it cannot go against you.
Repay On Time
This counts for any area you are borrowing money, but is most vital on your mortgage repayments. It is never a good idea to miss a payment but being late with your mortgage is a sure-fire way to lower your credit rating.
By being on time when paying back all current credit cards and loans you will appear more responsible to a lender. Even making sure you use your Amex credit card once a month and paying it off right away can help.
Avoid Frequent Credit Checks
Unless you have decided to commit to a particular credit card or loan you should not allow anyone to search your credit report or convince you that you need to apply just to find out information.
By doing so your credit report will have a trace each time a check has been done; too many of these and you will look desperate for credit and when you really need it you might be refused.
Don’t Withhold Information
When you apply, make sure all the information you provide is 100% accurate. This includes employment status and mortgage information. If you are found to be lying about any of this it is bad news for your rating.