Media post: How to improve your credit score by 200 points – 5 simple steps to increasing your credit score

What is your credit score?

Your credit score is a score that independent credit reference agencies use to let you know how good or bad your credit file is. There is sometimes confusion, as different credit reference agencies use different scales to rate credit. For example, Experian rate your credit out of 999, while TransUnion have a maximum credit score of 710.

What is a good credit score?

This varies depending on the credit reference agency, and a ‘Good’ credit score isn’t the best credit score you can get with most agencies also rating credit files as ‘Very Good’ and ‘Excellent’. The table below shows what each of the main credit reference agencies consider each credit rating to be:

What is my credit score based on?

Your credit rating is built up of several different elements, which all combine together to give you your score:

– Public information (Electoral register, CCJs, Insolvency Voluntary Arrangements)

– Your active credit

– Your settled credit

– Your defaulted credit

Each piece of information has a positive or negative impact to your total credit score, for example:

– If you are paying a loan each month, with no arrears, this will have a positive impact on your credit score.

– If you are in arrears on a credit card, or over your credit limit, this will have a negative impact on your score.

– If you defaulted on a loan 4 years ago, this will have a negative impact on your score.

– If you pay off the default, this will lessen the negative impact of the default.

Every credit profile, or piece of public information remains on your credit report for 6 years. If you default on something, there is no way to remove the default, you can only show it as paid off, once you clear the debt.

How can I increase my credit score?

We would firstly recommend that you sign up to a credit reference agency so that you can see your credit file in detail, https://creditkarma.co.uk offer a free credit file service and run this each month so you can see any changes.

There are a few potential quick wins if you are looking to increase your credit score, here are our top 5 tips:

1. Register to vote

Although this has nothing to do with credit, all finance companies look at this information and use it as ‘trace’ to show your address history.

2. Catch up any active arrears you have

This is a major factor in whether a finance company will lend you any money. If you are in arrears, then most finance companies will see this as a sign of financial struggles and reject your application on that basis. This also includes being over your arranged overdraft limit on your bank account, or being over your credit limit on any credit cards, or catalogues you have.

3. Make sure your active credit is all registered at your current address.

If you have active credit (such as a bank account, mobile phone contract, or credit card) at an old address, this is a sign to a creditor that you may not inform them when you move address, which could present a risk to them if they need to contact you.

4. Make sure you have enough active credit.

Check that your bank account, and mobile phone contract are visible on your credit file. If they are not, then there is a chance you could have ‘no trace’ when applying for finance, meaning that finance companies might feel there is some information you are hiding from them and reject your finance application.

5. Pay off any old debt.

If you have defaulted or received a CCJ, no matter how long ago, you will remain liable for the debt, until it is paid off and the creditor could pursue this at any time. It will get removed from your credit file after 6 years, but the creditor could still pursue you for the debt after this time as most finance companies sell their debts on to recovery companies.

When you have a default on your credit file, it will show 2 amounts – the balance when you defaulted, and the balance now. If you are able to either reduce the balance, or pay it off in full, this will boost your credit rating and show creditors that you have the intent to pay back any finance they offer you.

How can I get approved for bad credit car finance?

There are several fair and bad credit car finance providers that operate in the UK, and companies such as Get A Better Car Nottingham specialise in helping customers with bad credit to get approved for car finance. Read their car finance explained article here > https://www.getabettercar.co.uk/car-finance-explained/

This article was written by Duncan Twigg, Director of Get A Better Car Nottingham – Fair and Bad Credit Car Finance Specialists

See their current cars at https://getabettercar.co.uk

Apply for car finance at https://getabettercar.co.uk/applynow

Find out about Nottingham Car Finance at https://getabettercar.co.uk/car-finance-nottingham/

No Deposit Car Finance explained at https://www.getabettercar.co.uk/no-deposit-car-finance-dealer/

Pay Weekly Car Finance available at https://payweeklycarfinance.co.uk/