How to Improve Your Credit Score
What is a credit score?
A credit score is a numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of an individual. For more information about your credit score including bad credit loans visit Simple Personal Loans.
How can I improve it?
- Register to Vote – Prove where you live.
Register on the electoral roll at your current address – This is to prove to credit lenders and brokers that you live at the address you’re claiming you do.
- Build your history.
Having little or no credit history can make it difficult for companies to assess you, and your score may be lower as a result. This is a common problem for young people and people who are new to the country, similar to those who have bad credit. It is hard for lenders and brokers to trust you as they don’t know what you’re like with repayments and finances.
- Make payments on time.
Making payments on time shows lenders and broker you are reliable so they are more likely to trust you and lend to you.
Why should I improve it & How can it benefit me?
These two go hand in hand, why you should improve your credit score and how it can benefit you. This is because improving your credit score can only benefit you, it can’t go any other way.
When you apply for credit, the lender or broker will calculate your score. This is to help them decide whether to lend to you. But, each company may have a different way of calculating it, depending on what information they have access to and their lending eligibility criteria.
The higher the score the lower risk. In other words, companies see you as a lower risk, so you’re more likely to be approved for credit. This is because a high score indicates you have a history of managing your finances in a great way.
The benefits of improving your score may include:
- Lower interest rates.
If companies think you’re a lower risk, they may offer you lower interest rates on loans, which can make borrowing cheaper.
- Access to more offers.
Whether it’s a loan or anything similar, a higher credit score means you’ll have better chances of approval.
- Higher credit limits.
If you improve your score, you should have a better chance of borrowing larger amounts. This means that you will find it easier to buy things which are more expensive, including things like a car.
How long does it take to improve your credit score?
You should be aware that improving your score isn’t something which occurs overnight. It takes time, careful decisions and dedication. It can take as little as one month, all the way up to multiple years.
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