Your credit score can be the key to being approved for a range of products such as loans, mortgages and credit cards. The higher the score you have, the better chance of being accepted and getting favourable borrowing rates.
That’s why it’s essential to keep an eye on your score and take steps to boost it if you feel it is getting too low. There can be many reasons for a dwindling credit score, and many of them can be easily fixed, and you can soon see that number surge again.
Here are three ways you can boost your credit score in 2021:
1. Keep On Top Of Your Credit Report
It’s worth pointing out that your credit report and credit score are not the same things. However, your score will be broadly reflective of your credit report. That’s why it is always worth checking your report regularly.
Your credit report will be able to flag up any potential problems which might adversely affect your credit score. Your report won’t give you your score, but many credit report agencies now operate a traffic light system. Many different aspects go towards your credit report, such as how you are coping with your current level of borrowing, what percentage of your overall credit entitlement you are using and the number of different credit products you have or have had.
How you are dealing with all these aspects will be ranked green, amber or red, with green meaning you are on top of everything, amber meaning one area might need some attention and red meaning you need to take immediate action.
By checking your credit report regularly, you will take the necessary steps to address any red light issues, which can help boost your score.
2. Pay Off Existing Debt Can Help to Boost Your Score
This may be easier said than done, but the more you pay off, the healthier your score will be. Try to concentrate on the credit debt which has the highest interest rates and pay it off first. This means that more of your repayments will pay down the capital rather than the interest.
Try to avoid paying the minimum monthly amount on credit cards. Doing this means the debt itself gets greater as more interest is added to the remaining capital, and you aren’t bringing down your overall debt.
The more you owe, the greater percentage it is taking up of your overall credit allowance, and this can prevent your credit score from increasing.
3. Make Sure Your Details are Correct
One of the most common reasons people are refused credit has nothing to do with their ability to repay, but because a lender cannot confidently verify their identity. Credit agencies hold personal information such as your name (and any previous names you went by), date of birth and past and present addresses. It is worth check with credit agencies if this information is accurate or outdated. It also helps to ensure that you’re on the electoral roll.
You may also be financially tied to another person if you have taken out a joint mortgage or loan in the past which can affect your credit score, even if you have a relatively healthy credit history.
Is Your Poor Credit Score Stopping You From Banking?
Here at Suits Me, we believe in financial inclusion which means that if your credit score isn’t excellent, or even good, we will be able to provide you with an easy way to manage your finances and boost your credit score!
Our accounts are personal e-money current accounts that work similarly to a traditional bank account. You’ll gain access to online banking and our mobile banking app, where you’ll be able to manage your money on the go, 24/7.
We offer a whole variety of banking features including:
- The ability to set up standing orders and manage direct debits,
- Send money home and abroad via a bank transfer,
- Gain access to our exclusive cashback reward programme where you’ll automatically get a percentage of your money back when you use your Suits Me debit card with our retail partners.
Opening a Suits Me account takes 10 minutes and you’ll gain access to your online banking immediately so you can start managing your money. We don’t ask for proof of address or run a credit check. We accept 99.8% of all applicants – so if you’re looking for a suitable alternative banking solution apply today!