No one has a perfect credit score. And even if they do, it doesn’t guarantee them credit.
Even people with good credit scores can be rejected by some lenders. This is why brokers like us are a good option. A broker works with a number of different lenders, so they can find the right deal for you without the risk of the rejection spiral – where one rejection damages your score, so you apply again and get rejected, which damages your score, etc. etc.
However, the better your credit score, the more likely it is that lenders will look favourably on you.
Improving your credit score is tricky if you have debt, CCJs or mortgage arrears, but there are a few things that you can do it to raise your score.
The first step to improving your credit rating is to know what it is. There are three main credit reference agencies to check, Equifax, Experian and Callcredit. They offer free trials or free versions to allow you to check your file.
While you’re looking at your file, make sure you check for errors, such as addresses on old accounts. You should check them on a regular basis, about once a year, and particularly before a credit application, so you can manage it effectively.
A couple of relatively quick things that you can do to help boost your credit score are:
One of the best things that you can do for your credit rating over time is to make sure that you pay your monthly payments on time and in full. This includes everything from your mobile phone bill to your mortgage repayments.
Getting rid of debt is something that will have a big impact on your score. Obviously sometimes this is easier said than done, but get on the right track to paying it off and your credit score will be better for it. If you have savings, use them to pay off your debts.
Stability looks good to lenders too, so keeping the same personal details across applications is recommended if possible. Things like a landline number, staying with the same employer, same bank and same home address helps demonstrate stability, which lenders like too.
Building a good credit history can be done by taking out credit and then paying it back in full on a regular basis. For instance, if you were to get a car finance loan with us, used it to buy a car and then never missed a payment, that would help to boost your credit score. Missing a payment would make your situation worse.
The trick with this is knowing where to apply so you’re unlikely to get rejected. This is why brokers like us are a good option. A broker works with a number of different lenders, so they can find the right deal for you without the risk of the rejection spiral – where one rejection damages your score, so you apply again and get rejected, which damages your score, etc. etc.
You could opt to get a loan with a guarantor. A guarantor is usually a family member or good friend, who co-signs the loan. If you are unable to make the repayments, the guarantor is liable to pay. If you make the repayments on time, then it will help you rebuild a good credit score.