It’s fair to say that a new tax year doesn’t exactly evoke the same levels of excitement, nor inspiration for ‘new starts’, as a new calendar year. In truth, unless you file tax returns or are juggling ISAs, it’s a bit of a non-event.
But it is as good a time as any do a financial health check, and one important component of this is your credit score.
After all, if getting a mortgage, applying for finance to purchase a car or gaining any other types of loans in the future is something that could be a part of the plan, then it is well worth putting a bit of thought into how you can get your ducks in a row with regard to your credit file.
And the good news is it’s not really very labour intensive at all. Here are some quick and easy ways to boost your credit rating…
1. Check it!
The first port of call is to check your credit file. You can sign up with credit reference agencies like Noddle or ClearScore for free, and although the score itself may seem a bit arbitrary, you can quickly gather how well you are doing in a relative sense. More importantly, you’ll also get a breakdown of what is counting in your favour, and what isn’t.
If you see anything you suspect is incorrect, it’s important that you act. You can either contact the relevant company or take things further with a ‘notice of correction’. Bear in mind that any ‘blemishes’ will stay on your credit file for up to six years, so you certainly don’t want to be dragged down by any inaccuracies.
2. Register to vote
The next UK General Election may not be scheduled until May 2022 but who knows what will happen before then – especially with the ongoing uncertainty surrounding BREXIT. It doesn’t matter which way you vote – or if you even vote at all – but it is vital that you register yourself on the electoral roll. For lenders, it’s a means of proving your address and ID, which would firm up any application for credit. It takes just a few minutes to register, and you can do it by clicking here.
3. Use your credit card wisely
In the eyes of lenders, having no credit is every bit as bad as having poor credit. A credit card is thus one of the best means to demonstrate that you can manage debt sensibly. Use it each month, but be sure to clear the balance each time. If you’re already juggling high balances, then put all your energies into whittling these down – not only by setting money aside each month but also by looking into things like consolidation loans or 0 per cent balance transfers. Ultimately the aim is to have as high a limit as possible but to use as little of it as you can.
4. Be careful when you apply for credit
Each time you apply for a loan or some other form of credit, it leaves a footprint on your file as a result of what’s known as a ‘hard search’ by the lender. Too many footprints can indicate excessive hunger for credit or desperation in the eyes of lenders, which will thus do you harm. So when shopping around, be sure to use things like free eligibility calculators, and ensure that any quotes you apply for won’t leave a mark on your credit file. The website will typically indicate this beforehand.
5. Other bits of good practice
There are other little things you can do to help the cause. Get a mobile phone contract (if you don’t have one already). Don’t ever withdraw cash from a credit card. Stay away from payday loans. Avoid excessive online gambling. Cancel any unused credit or store cards. And focus on getting any debt you may have under control. They may all sound like minor things, but all these small gains can really help your cause when the time to apply for credit comes. Good practice now will see you reap the benefits later.
Midlife mum from Cardiff. Wine Imbiber. Likes glitter, fluff and olives. Approaching tweendom with Caitlin (11) and Ieuan (10). The husband is hiding in the loft.
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