CreditEveryone goes through financial difficulties, so don't think you're alone if you've been finding it hard to make ends meet lately. Cleaning up your credit rating isn't the arduous task you'd imagine. It's well worth the effort too, allowing you to qualify for preferable interest rates and lower insurance premiums. Here are a few tips to get you started.
1. Use a credit card
Yep, I know what you're thinking, using a credit card was the start of your financial woes. Well, now it can help to solve them. Believe it or not using and regularly repaying a credit card will do wonders to improve your credit rating. If you can, try and a card that reports to all three credit bureaus, giving you a maximum boost to your rating.
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2. Check your credit report
It's free to check your credit report, so nothing is stopping you from taking a look at your current scores. Any defaults or late payments will be listed along with your details. Check these thoroughly as errors are actually quite common, if you find one you can submit an appeal and once this has been verified it will be taken off.
3. Cancel your unused credit cards and accounts
Lowering your available credit should help to boost your score so cancel any old cards and accounts. You may think an open account with nothing in is doing you no harm, but if you've got access to an overdraft facility on that account then it will be harming your rating.
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4. Keep your finances separate
If you share a bank account with someone with a poor credit rating, by association they could lower your rating too. We're not just talking about a joint bank account with your spouse, if you live with a housemate and share an account for the bills, you will also be classed as financially linked.
5. Use your savings
Your savings aren't helping your score if you have debts. Use any spare cash to pay off your existing obligations, this will not only boost your credit rating, but save you money too.