How to improve your credit score UK - YouTube

Hello and welcome to Finder’s financial self-help  series where we swap scented candles for sage  

money tips and advice. Check it out. The dreaded credit score.  

What is it? Where does it come from?  And how can you make it better?  

Whether you have a low credit score  or just want to improve yours a bit,  

check out these 6 tips to increase your score and  open the door to better rates, credit products  

and general bragging rights. Your credit score is a numerical  

rating that’s calculated based on your  financial activity and credit history.  

When you apply for a form of credit, like  a credit card, loan or even a phone plan,  

lenders will look at your credit score to see  how trustworthy you are when borrowing money.  

So having a good credit score is pretty  important if you want good interest rates  

on your credit card or mortgage, or even just  call your gran off your own mobile phone.  

There’s no one definitive “good” credit score,  as each credit reference agency uses a slightly  

different scale as a benchmark. To get your credit  score, you’ll need to apply for a credit report  

via one of these agencies. The biggest ones in the  UK are Equifax, Experian and TransUnion. You can  

also get free access to your credit score through  Finder - links are in the description below.  

A poor credit score could be the result of bad  credit history, from late or missed payments,  

going over your credit limit, filing for  bankruptcy or having outstanding county  

court judgments. You can also have a low score  just because you haven’t yet built up any credit  

history. While there’s no overnight fix, here are  6 ways you can improve your credit score.  

This is possibly the easiest way to help build  your credit rating. Being on the electoral roll  

gives lenders proof that you are who you say  you are when you apply for a form of credit.  

While it’s not always possible, having a  stable address for an extended period of time,  

whether you’re an owner or renter, also  reflects well on your credit file.  

Whether it’s your phone, utilities or mortgage  repayments, paying your bills in full and on time  

tells lenders you’re financially responsible.  Overdue amounts can become defaults, a term  

used for when you break your credit agreement,  and could leave a black mark on your record.  

Make sure you regularly check your credit  report for any errors in your personal  

details or financial history. Even minor  mistakes, like having the wrong date of birth,  

can affect your borrowing power. And, while you’re there, keep an eye out  

for any fraudulent activity, like someone  trying to apply for credit in your name.  

Report anything suspicious to  the credit reference agency.  

It sounds complicated but your credit  utilisation ratio is simply the amount of  

credit you use compared to your overall credit  limit. For example, if I have a credit limit  

of £1,000 on my credit card and spend £400 of  it, my credit utilisation ratio would be 40%.  

30% and below is considered a good ratio.  

If you’re still paying off a loan or credit card,  you should prioritise getting these debts down as  

much as possible or paying them off in full.  Ideally, you should pay off most or all of  

your existing credit before applying for more.  And, once you’ve paid off that debt, it can be  

a good idea to keep those accounts open even if  you don’t then use them. This shows that other  

banks are willing to offer your credit and helps  to keep your credit utilization ratio low.  

If you have multiple debts, consider  consolidating them into one lump with a  

debt consolidation loan or 0% balance transfer  card, which shows lenders you’re responsible  

when it comes to paying off your debts. Receiving any county court judgements for debt,  

or having any form of bankruptcy or default  in your history, will seriously affect your  

credit score and make it much harder to get  a loan or credit product in future.  

Having no credit history is a little  better than having a bad credit history,  

but it could still limit you when it comes to  interest rates and how much you can borrow.  

If you’re eligible, consider opening a credit  account, like a low-interest credit card.  

If you struggle to qualify, try a credit-builder  credit card which is like an entry-level card that  

can act as a stepping stone to a better credit  score, better cards and better rates.  

Just make sure to pay off your  balance on time each month,  

otherwise you may end up negatively  affecting your credit rating.  

For more information on credit scores and credit  products available to you, and how to get your  

free credit score through Finder, head to  finder.com - links are tagged below.  

If you enjoyed this video give us a  like and subscribe to our channel.  

Thanks for watching.