We are often asked about credit scores by customers and those looking to borrow via a personal loan. Many worry that their score is not good enough to borrow. Some ask if applying will affect their rating. We take a look at what is entailed, and mainly we examine how to improve your credit score.
How To Improve Your Credit Score – Your Score Explained
Many do not fully understand why their score is what it is. Many do not even know what our score is at all! As we have not checked for years. Anyone can check, and you should be able to get a free trial too so that it does not cost you. But a score is a culmination of your credit report. And your report generally exists for one simple reason. It is there as a guide to organisations that you wish to or already do interact with. It shows them whether they should trust you, by examining your previous financial history. Thus it is important for anyone looking to borrow money.
What Affects The Score
Firstly, it is important that your personal details are full and accurate on your report. Missing details does not project a good look. Small details like having been at the same address can help, but they are not the be all and end all. Ensure you are on the electoral roll too, as not being on it will reduce your score. But mostly, it is about making repayments on time for any borrowing you have made. It is this that will guide your final score.
How To Improve Your Credit Score – Borrowing Is Good
It is a strange quirk of the system that never borrowing does not ensure you get a good credit score. That is because lenders want to see evidence of someone who borrows and pays back everything on time. Without evidence, they have no idea how trustworthy you are, even if a lack of borrowing suggests financial stability.
Missing Repayments Is Bad
This is the key aspect of acquiring an unattractive credit score. Every missed payment is a dagger through the heart, and what’s more, will remain your credit file for six years. So do try and make repayments when you can. In the current climate if you struggle, ensure you agree a payment holiday. Do not just cancel direct debits and turn a blind eye to your problems. Other events that will destroy your rating include going bankrupt, county court judgments and similar issues.
How To Improve Your Credit Score – How to Repair Your Rating
Firstly, check your report. There maybe errors, as unlikely as that is. It is definitely worth checking, as your score may be inaccurate. Then to repair a rating further, you need time. Ensure that you make timeous repayments for any debts you have, and in time, your score should improve. It requires patience to repair a score.
Can I Borrow With Poor Credit?
Yes. Many think that a mixed or poor credit score or history prevents them from borrowing. Many lenders will source finance for such people, and Moolr are one of those companies. However, borrowers should understand the situation perfectly. Finance is not guaranteed, and if accepted, interest rates are likely to be higher than for those with a good rating. Only borrow if it is a necessity and a last option. Otherwise try and improve your score first, and be patient.
