How To Improve Your Credit Score Quickly

At Debt Consolidation Loans, we believe in offering as much advice as possible to help you find the best credit solution for your situation. On this page, we will be detailing how to improve your credit score, why you may want to improve your credit score, and financing alternatives that do not rely on your credit rating. That way, you can make take the steps needed to improve your rating before applying for credit or choose a different option to better suit your circumstances.

What Is A Credit Score?

Your credit score is a representative number that is generated from information held within your credit file. This score may differ between lenders and products, depending on the requirements that you need to meet to become a customer. While the lenders and finance companies are able to see your general credit score, they are also able to take a closer at the last six years of information, including past credit applications, any defaults or arrears, and completed credit cases. This is why it is a good idea to improve your credit score in the UK as much as possible before applying.

Your most recent information is usually considered as the most important, despite lenders having access to six years’ worth of information. From a review of your current financial situation, they will typically be able to decide whether they want to lend to you, how much to let you borrow, and how much interest they should charge. To potentially reduce your chances of being turned away, there are several steps that you can take to improve your credit rating fast, but the initial step is to check your rating.

How To Check Your Credit Score

There are three main credit scoring agencies in the UK – Experian, Equifax, and TransUnion. Each of these agencies hold financial information on everyone and allow to access the files they need during a credit application. To help you improve poor credit, these agencies allow you to freely access your full credit report through their partner websites, including Credit Karma and ClearScore, as well as many other trusted sites.

All you will need to do is create an account with your chosen partner site and submit some basic details. You will be able to access a general overview of your rating, which will be displayed as a number between 300 to 850, as well as tips on how to improve your credit score, insights, and your financial history from the past six months. This will give you an insight into what a lender or finance company may see when processing your secured debt consolidation loan application.

How To Improve Your Credit Score In The UK

If you have taken a look at your score and found it less than perfect, you will be glad to know that there are lots of simple ways to improve your credit score. Many of these steps are fairly quick to do, but some may take a few months to carry out, and the improvements to your credit score may take time. However, it is worth making these changes in case you need to apply for a financial product in the future. The ways to improve your credit score include:

• Register on the electoral roll – this is a very simple step that can be done in a matter of minutes. If your name and address is not on the electoral roll, you might find it difficult to secure credit, so visit gov.uk to register.
• Check for mistakes – as you can access your credit score for free, you are able to check for mistakes at any time. Take the time to review your personal details, addresses, and information about past credit applications, as your credit file can be affected by mistakes. Make sure you report any incorrect information straight away before applying for an unsecured debt consolidation loan.
• Check if you are linked to another person – if you are linked to a spouse, friend, or family member’s credit rating on a joint account, this could affect your personal rating if they have a poor credit score. It is always worth discussing each party’s financial position before applying for a form of joint credit.
• Try to pay off existing debt – while it may be easier said than done, you should aim to pay off any outstanding debt before you apply for new credit. Finance companies may be hesitant about increasing your debt if you already have a high existing balance.
• Pay your bills on time – paying your bills on time is a great way to improve poor credit. By paying for your utilities, phone or internet bills on a set date, you can prove to lenders that you can manage your finances. An easy way to solve this issue is to set up direct debits with your providers, which can sometimes result in special offers or deals too.
• Avoid submitting too many credit applications at once – applying for too many financial products within a short space of time can have a very negative impact on your credit score, so you should allow time between applications. Every time you apply, a finance company will conduct a hard search on your credit rating, which can lower your score. This means that multiple applications in quick succession can leave huge damage.
• Avoid moving home or changing jobs too often – lenders usually want to see stability on your credit file, so you should avoid moving home or changing jobs too often. If possible, you should make sure you work in one job or live at one address for a considerable period.
• Keep your credit utilisation low – credit utilisation refers to how much of your available credit limit you use. Using less of your available credit will usually be seen positively by lenders and help to increase your credit score. For example, if you have a credit limit of £4,000 and you have used £2,000 of it, your credit utilisation is 50%. You should try to keep your credit utilisation at 25% or lower to show you are able to effectively manage your finances.

Poor Credit Alternatives

If you have tried and exhausted all of the ways to improve your credit score, there are a few options that do not solely rely on your file. Not only could these be better for those who cannot improve their credit score, but they should also be considered by all individuals before applying. These include:

• Using savings – if you have a considerable amount in your savings account, it could be sensible to use your own cash in place of a loan or form of credit. That way, you can avoid having to improve your credit rating fast and paying back more than you borrow due to interest.
• Borrowing from a credit union – credit unions are usually non-profit communities that are formed to help their members secure credit when they need it. You will need to apply to your local credit union to access their services as they only offer help to their members. Many may offer credit based on affordability, rather than reviewing your whole credit history, and their interest rates are capped at 2% per calendar month.
• Personal borrowing – have you considered borrowing from your friends or family? If you have a trusted person who could lend you money and offer you repayment terms to suit you, this could be a good way to cover your cash needs if you have tried all other options.
• Bad credit loans – the checking process for debt consolidation loans for bad credit is based on affordability, rather than simply your credit rating. This means that a lender could review your monthly income, essential outgoings, and any other financial to ensure you can sustainably make repayments. While this option does not solely rely on your credit score, a credit check will be carried out, so you should try and pay off any existing debts before applying.

If you are struggling with your finances or would like more information on how to improve your credit score in the UK before applying for credit, please seek impartial support from the Money Advice Service.

At Debt Consolidation Loans, we can help to consolidate your debts by providing loans to pay them off in full. By merging your debts together into a single loan, it may be simpler to manage your finances and you might find peace of mind in knowing your finances will be back on track. If you would like more information about our loans, please contact us and our friendly team will help.