If you’re having a hard time taking out a loan, it could be because of a poor credit rating. Poor credit is a growing problem – but thankfully there are steps you can take to try and improve things. We’re going to look at a few of them:
1. Pay on time
Don’t miss your payment deadlines. This is crucially important as any missed payments will count against your credit score. If at all possible, try and pay off more than the minimum so you can clear your debts as early as possible.
2. Build a history
A lot of lenders want to be able to predict how you’re going to spend – and to know that you’re reliable in paying it back. That’s a lot of what the credit rating is for. If you’ve spent a long time outside of the system, try and build a reliable history by paying off your credit regularly.
3. Don’t apply for too many loans or credit cards
Being rejected in an application can be held on record and could end up working against you. Make sure you select your applications carefully rather than just applying for anything and everything. Only apply for loans you have a good chance of getting – rather than just thinking “the more the better”. That’s not how this works, and it could affect your rating.
4. Protect your identity
Having your identity stolen could be a disaster for your credit score. Many identity thieves run up huge loans with no intention of paying them back – all in your name. There are a number of ways to can spot identity fraud, but make sure you are aware of all your outgoings so that you can see any suspicious activity as soon as possible. You could also use identity theft protection.
5. Try and keep your “available credit” high
Make sure you’re not running right at the edge of your credit all the time, as this could imply you’re struggling to manage your finances. Keeping up to 50% of your credit available is recommended.