Perhaps you want to get a good mortgage, or maybe you simply want to qualify for better rates on credit cards or personal loans. Whatever the case, a good credit rating can be invaluable. There are a number of steps you can take to give your rating a boost. Some are long-term strategies, while others are surprisingly quick.
Look at Your Credit Report
You will be in a far better position to look at your credit rating if you actually have a look over your credit report. This can help you identify where your situation is at the moment, but also see if there are any mistakes. Sometimes, information relating to someone you live with or even a previous occupant of your home can accidentally become attached to your credit report, and this can result in you being falsely marked down. If you don’t identify the problem and request it be corrected, the mistakes will just sit there, unnoticed except for the effect they have on your overall rating.
Borrow
Whether you have actual bad marks in your credit history or are just an unknown quantity with no history of borrowing, the best way to improve is to take out some credit. This is easiest to do with a credit card. Even if you don’t qualify for the kind of credit card deal you want at the moment, take out the best card you can and use it for small amounts of spending. Pay them back promptly, before interest accrues, to build up a reputation as a reliable borrower.
Cancel Old Cards
If you have lots of old credit cards you no longer use, now is the time to cancel them. A lender looking at your credit report won’t be aware that the cards are disused. They will simply see that you have a lot of credit cards in your name, and be concerned that this might mean you are struggling to manage your finances. Making sure you cancel your old cards will noticeably improve your rating.
Know What Goes on Your Report
It is useful to know exactly what does and doesn’t go onto your credit report in order to appreciate which things will have an effect on your overall rating. For example, many people don’t realise that bill payments can appear on their credit report. Late payment of a bill can bring your credit rating down in much the same way as a late loan repayment.