30 September, 2020
1 Register to vote
If you’re not registered on the electoral roll you will find it very difficult to apply for credit. Being on the electoral register allows lenders to prove who you are and where you live.
2 If you haven’t had credit, get some
Your credit score is an indicator of how trustworthy you are in terms of credit. Lenders will use your score to decide what kind of interest rates to offer you. If your score is low, this implies to lenders that you’re not very reliable and so you will be offered higher rates.
Using credit and paying it back on time every month is a good way to build your credit score as well as paying your phone bill.
3 Don’t apply for too much credit
Everytime you make an application for credit it shows on your credit report as a hard search. Applying for a lot of credit over a short period of time gives lenders the impression that you’re in financial difficulty or that other lenders are denying your applications.
4 Keep credit utilisation low
The amount of credit you’re using makes up 30% of your credit score. Using more than 30% of your total credit negatively affects your credit score.
5 Make your payments on time
Your payment history is the most important factor in your credit score as it makes up 35% of your overall score. A missed payment negatively affects your score. Missing payments and defaults stay on your credit report for 6 years.
6 Check if you are linked with another person
Someone else's credit won’t actually affect yours however, opening a joint account with someone who has bad credit will so it is best to avoid doing this.
7 Stay at the same address for a long period of time
Being at the same address for a long time implies to lenders that you are stable and less of a risk.
Check your loan eligibility by clicking here.
Editorial Disclaimer: This article was updated 18.10.2021
Opinions expressed here are the author's alone, and not those of any bank, credit card issuer or any other company. This article has not been reviewed, approved or otherwise endorsed by any of these organisations.
NB: The information on this page does not constitute financial advice, please do your own research to ensure that the product / service is right for your individual circumstances.