Improve Your Personal Credit Rating
Article written by the money team at moneysupermarket who write about everything finance related, from ISA savings to credit cards.
In recent years borrowing money has gotten extremely difficult, and that’s mainly due to the current economic situation. According to usdebtclock.org the total US debt is over $55,629,628,777,547 so it’s no real surprise that its gotten harder to borrow some cash.
To be approved
To be approved for credit in today’s market, you need to ensure that you maintain a good credit rating, because this is the first thing that the lender will check when you fill out an application to borrow money.
Are you a reliable candidate for funds?
When a lender checks your personal credit rating, they are basically checking to see if you’re a reliable candidate for funds, and the more reliable you look to them, the lower the interest rate will be that they offer you. On the flip side, if you don’t look like a reliable person for funds, then you may have your application rejected.
Understand your rating
Before you improve your personal credit rating, you first need to know and understand the details of yours. There are many credit reference agencies like Experian, that for a very small fee (and sometimes free) will provide you an up to date detailed report.
It’s important to know all the different aspects of your personal credit report, the smallest whole or error can see you have an application for credit rejected. If when you receive your report you notice something isn’t right, contact the agency direct to find out what the problem is.
What is your total credit?
When you fill out an application for credit, the lender will automatically check the total amount of credit that you have at your disposal. This includes credit that you don’t use, so if you have four credit cards, your total credit will be the available spend on all of the cards together. If you have too much credit this will affect what the lender is willing to offer you, it is said that the ideal amount of credit cards is 3.
Always pay on time
If you are worried about tarnishing your personal credit rating, or if you simply want to improve it, you should make sure that you make all your payments on time every time. Making a late payment or missing a payment all together can seriously affect your credit score. To make sure you make all your payments on time, try to set up direct debits, this way you will never miss a payment as they will be automatic.
Be honest
When you fill out an application for credit, you should always fill it in truthfully. The lender will be able to notice any lie, even by omission, and they will swiftly reject your request for funds.
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Tags: Credit, Credit Rating