Understanding Your Less Than Impressive Credit Score
Have you recently checked out your credit score only to be alarmed by the figure looking back at you? If you have a poor rating, and you have no idea why, you aren’t alone. Credit ratings can be complicated, and there are a number of different factors that influence what your score is. Below, we take a look at them in further detail, so that you can get to the bottom of what is giving you a bad score and put it right.
Factors that could have resulted in your bad credit rating:
- You don’t have a credit card or loan – Believe it or not, but no credit at all is just as bad as failing to pay back any finance you have had. If you have never had a credit card, lenders have no way of knowing whether you are a person worthy of lending to.
- You have a joint account with someone else – If you are linked to someone else financially, his or her negative credit rating could be having a negative impact on you. This could be a business partner or your other half – anyone that you have any type of official financial tie with.
- You don’t make repayments on time – You know that mobile phone bill that you keep paying several weeks late, well every missed payment goes on your credit rating, and it doesn’t look good for you.
- Your details aren’t up-to-date – Lenders use credit checks to make sure that you are who you say you are. If your personal information is not up-to-date, it is only going to have a bad impact on your score.
- You only make the minimum repayment – If you only make the minimum repayment on your credit card each month, it could lead lenders to believe that you are finding it difficult to clear your debts.
So, how do you improve your credit score?
Now that you are aware of the different factors that influence your credit rating, let’s take a look at the various ways you can boost your credit score:
- Update all personal information – You need to make sure that all of your address information is up to date.
- Cancel any credit cards you don’t use – By this, we don’t mean cut up your card. You need to ring up the provider and cancel it.
- Take out a loan – This may sound counteractive, but loans from the likes of Cash Train could have the solution you need. By taking out a bad credit loan, and paying it back on time, you show that you are a reliable person to lend money to.
- Limit new applications – Don’t make endless applications for new loans and credit cards. This will reflect badly on you. That is why it’s wise to choose a loan for those with bad credit, as there is a much higher chance of you getting approved the first time around.
- Pay off your debt – Last but not least, pay off any outstanding debt, starting with the biggest and working your way down.