How to maintain a good credit score
It's useful to know your credit score. It indicates your creditworthiness, for example, when you’re applying for credit. A poor score can suggest to lenders that you may be having financial difficulties (and are therefore less likely to be able to make repayments on any credit that they may offer you). A good score, on the other hand, could help to reflect your ability to pay them back.
There are some things that you can do to improve your credit score. Once you’ve got a healthy score, though, how do you maintain it? Here are some ways:
- Keep making repayments on time
Late or missed payments can show up on your credit report. You should keep making any repayments promptly as this will show lenders that you’re responsible with money. This will improve your chances should you make any new applications for credit.
- Don’t apply for too much credit
If you’re applying for too much credit or making too many applications, lenders may think that you’re desperate for cash. This potentially suggests that you may not be able to pay it back.
- Consider financial associations carefully
Making a joint application for loans like mortgages might seem like a good idea. But did you know that the other person’s credit history could impact your ability to obtain credit in the future? When you apply for credit, lenders look at any financial associates that you may have, even if you’re applying for this new loan solely in your own name. A financial associate with a poor borrowing history could affect your ability to gain credit, so make sure to weigh the pros and cons before entering into a financial link with someone else.
- Ensure your details are updated on the electoral register if you move
Being registered on the electoral register lets lenders verify your personal information. If you’ve moved home, make sure to register at your new address.
You may also like to check your Equifax Credit Report & Score – it’s free for the first 30 days then £14.95 monthly. In addition to showing you your score, it also lets you view your borrowing history, so that you can see where there is room for improvement.
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