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How to Check and Improve Your Credit Score
A good credit score is essential for getting products such as loans, mortgages, and credit scores. Checking your credit score is free, but most young people in the UK have yet to check their credit rating.
Reports indicate that 72% of people aged 18 to 25 years have never checked their credit report. This is despite an individual’s information being the key to getting a loan, credit card or mortgage.
Of those who checked their credit rating, 20% did so over three years ago. What most people don’t know is that checking your credit score can save you hundreds of pounds. According to Experian, the APR offered on a loan could fall by 2% on average if the individual checks and improves his or her credit score.
Basically, if an individual was to improve their credit score from poor to fair, they can save more than £350 on a five-year loan of £5000.
So, how do you check and improve your credit score?
In this post, we’ll discuss how you can check and improve your credit rating.
Checking Your Credit Score
If you want to check your credit score in the UK, you can do so for free via major credit agencies. There are three major credit agencies.
- Equifax
- Experian
- TransUnion
Equifax
Equifax is a global data, analytics and technology company that serves as a steward of financial literacy. As a credit agency, the company provides access to your credit score report. This is essential for gaining financial independence and accessing capital.
To get your free credit score report, visit equifax.co.uk. Click “Get your free Equifax Credit Report and Score.” The site will redirect to another webpage to fill in an electronic form.
You’ll fill your:
- Forename
- Middle Initial
- Surname
- Gender
- Date of birth
The next step is to create your user account followed by reviewing the terms and conditions and finally, entering your address. Double-check the information you provided. Equifax will require you to confirm your identity. You must have the following information.
- Current account details
- Address for up to 6 years
- Credit or store cards
- Mobile phone number
You need to know that Equifax offers a 30-day free trial. After the time period elapses, they will charge you £7.95 each month. You can cancel before the charge. Alternatively, you can use ClearScore.
ClearScore
ClearScore is a leading FinTech company in the UK. Currently headquartered in London, the company’s mission is to change how people manage their finances. It all starts with your credit score.
The company uses data from Equifax to provide you with a comprehensive credit score report. To check your credit score, visit Clearscore.com, click “Check my score” and follow the instructions.
Experian
Experian is a leading credit agency, and you can access your credit score report for free from the company’s website. To do so, you must sign up. Visit experian.co.uk, click “Get my free score.”
The website will redirect you to the sign-up page. Fill in the following details:
- First name
- Last name
- Date of birth
- Email address
- Phone number
- Mother’s maiden name
Check the button if you agree with Experian privacy policy. In the next step, you’ll create an account. Fill in the following information:
- Password
- Memorable word
- Memorable word reminder
Check to agree with Experian Terms and Conditions. In the last step, provide three years of previous UK address. This is to ensure the accuracy of your records. Once you create an account, sign in to get your credit score report.
You can deep dive into the full credit report as well as enable real-time tracking and notifications. Experian offers CreditExpert service for £14.99 a month. New users have a 30-day trial, but you can cancel before it expires.
TransUnion
TransUnion is another credit agency that offers access to a statutory credit report. This is a one-off snapshot of your credit history. The report contains financial information about you. Lenders can use the information to decide on the amount of loan and interest rate.
To get your statutory report, click here. You must fill in the sign-up form by providing the following details:
- Forename
- Middle names
- Surname
- Date of birth
- Email address
- Phone number
- Postcode
Confirm that the details are true, create an account and print your statutory credit report. Besides the statutory report, TransUnion offers Credit Karma. This service allows unlimited access to your credit report, access to TransUnion credit rating and score. Plus it’s free for life.
To use CreditKarma, Click Here
You need to know that all three credit agencies offer mobile apps compatible with Android and iOS devices. This ensures access to your credit score report on the go.
How to Improve Your Credit Score
There are several ways to improve your credit score.
Correct Mistakes in Your Credit Report
While credit agencies and other institutions gather a lot of financial data about you, errors may slip into your credit history. Such errors include wrong name, address and phone number. In some cases, you may find errors caused by CRA’s procedures and mistakes.
For example, your records are mixed with those of another person with similar identification. This creates a mixed file. To discover such mistakes, we recommend looking at your credit score report at least once a year.
If you discover any mistakes, contact the credit agency immediately. They will rectify the information as soon as possible.
Pay Your Bills Early
Most people think that the credit score affects major financial areas such as mortgages, credit cards and loans. Well, they are wrong. Credit score affects car insurance, home insurance, mobile phone contracts and even utility bills.
Paying your bills on time such as electricity, water, internet, and phone landline on time will prove to lenders that you can manage your finances. If you are repaying any loans or mortgage, do so on time and stay within your credit limit.
If you borrow money and fail to repay on time, you’ll find it difficult to access the service.
Maintain a Low Credit Utilisation
Your credit utilisation is the credit limit available for use. For example, if your credit limit is £1500 and you’ve already used £750, it means your credit utilisation is 50%. Experts recommend that you maintain a low credit utilisation.
In this case, less than 25%. If you do so, lenders will increase your credit score. This means access to lower interest rates, mortgages and loans.
Think Before Applying for New Credit
Paying with a credit card is very convenient. All you have to do is order the goods and swipe. The problem is, if you apply for new credit, you’ll leave a footprint on your credit history. This is visible to all financial lenders.
If a lender has turned you down for credit, do not apply for new credit. Making multiple applications for credit over a short period means you’re in financial difficulty. It also means you’re not good at managing your finances.
To avoid rejection in your credit history, use an eligibility calculator.
Enrol to Vote
Registering as a voter can improve your credit score. This is because lenders use your information, such as your address to confirm where you live. They also use the information to trace other financial products.
As a registered voter, you’ll get on the electoral register where you can vote in referendums and elections. To register, you must be:
- A British, Irish or EU citizen living in the UK
- A citizen of another country living in Wales or Scotland
- 16 years of age and over (14 years or over in Wales and Scotland)
When you’re 18, and over, you can vote.
Final Thoughts
To ensure that you’ve got a great credit score, you must build a decent credit history. If you’ve poor credit score, getting credit is difficult. To ensure you’ve good credit score, pay your bills on time, maintain a low credit utilisation, correct mistakes in your credit report and enrol to vote.
It’s crucial to check your credit report once a year. This will help you discover any mistakes. If you split up with someone you had joint finances, de-link financially. All you’ve to do is contact a credit agency and seek notice for disassociation. This will stop their credit history from affecting your credit score.
Frequently Asked Questions
Got questions about your credit score? Check out our FAQ section below.
How do credit reference agencies calculate my credit score?
Credit reference agencies calculate your credit score based on a variety of factors. These include your credit history, credit applications, and personal details. Since different CRAs may use unique scoring models, your score might vary among them.
Why is having a good credit score important?
A good credit score is crucial as it influences a lender’s decision to offer you credit. It significantly impacts the terms and rates of credit products such as loans and credit cards. Generally, a higher score can lead to more favourable lending terms.
Can paying off debts with savings improve my credit score?
While your savings themselves don’t directly boost your credit score, using them to pay off debts can be beneficial. Reducing or eliminating outstanding debts, particularly those with high interest, can positively affect your score.
How does moving frequently affect my credit score?
Frequent changes in your residence may be interpreted as a lack of stability by lenders, which can negatively affect your credit score.