How good is your credit score?

With lenders ever increasingly using credit scoring to make lending decisions, having a good credit score has never been more important.

One way to improve your credit score is to use ‘credit building credit cards’. Our guide explains how these cards can help build a good credit score, as well as outlining two other ways that you can improve your credit rating.

Credit building cards can help build a good credit score

You may be surprised to learn that the most common reason applications for credit in the UK are declined is not for ‘bad credit’. In fact, the most common reason to be knocked back for a loan or credit card is because of ‘thin credit’ – where there is insufficient information about you on file for a lender to make a decision.

So, it is important that you build up a good credit record. Credit building credit cards allow you to demonstrate to lenders that you can manage credit. By using credit building cards and making all your payments on time, your credit record will show that you are capable of responsibly managing your borrowing.

If you do have poor credit, bad credit credit cards will again help you to repair your credit score.  Over time, making all the necessary payments to your poor credit credit cards will prove to future lenders that you are a low risk.

Make sure you are on the electoral roll

One of the easiest ways you can improve your credit rating is to ensure you are on the electoral roll.  Don’t wait for your annual reminder; contact your local council and make sure you’re on the voters roll straight away.

Make your payments on time

If you miss a credit card or loan payment, that will stay on your credit file for up to six years. A silly oversight can therefore prove costly for a long time. To protect your credit rating, make sure you always make at least your minimum repayments on time.