Top Tips: How to Improve My Credit Rating

Your credit rating can be crucial in key moments of your life, like getting a personal loan, a house or even a car.

You may be consistent with your payments; really loving life because you’ve just scored a great APR rate. But it’s still important that you know what can affect your credit score both positively and negatively. That’s why we’ve decided to gather the most common questions about credit rating and answer them for you!

Do I have a good credit rating if I always meet my credit repayments on time?

Repaying your credit on time does work in your favour when it comes to your credit score. However, that’s not always the only factor. You may have a good credit score, which might encourage you to take out loans, as you would receive a good APR rate. However, if you apply for too much credit within a short period of time you could be labelled as ‘credit hungry’, and your score could drop.

What is the ideal length of time to live at an address?

The longer you live at an address the better it is for your credit rating. If you move often, credit agencies and lenders will find it hard to track your movements and this could result in your credit rating dropping.

Although lenders would find it easier to check your credit history if you stayed in the same place for three years, they know that this is not always realistic. So, the next best thing is to ensure traceability for the past three years – meaning you should be able to provide proof of having lived at any of the addresses you may have had during that time.

How important is it to be on the Electoral Roll?

Being on the Electoral Roll is a good way for credit agencies and lenders to confirm your identity and address, which could make them more likely to approve your credit application. Registering to vote is one of the simplest ways of helping to improve your credit score, so we strongly advise you to do so.

Is it a good thing if I already have credit at my house?

Yes, because it proves that one lender has already calculated the risks of lending to you and has decided to offer you credit. After one lender has deemed you to be creditworthy, chances are your credit rating will improve and others will too.

Are there other ways to improve my credit score?

Traceability is just one way you can improve your credit score. You may also need to wait for any CCJ’s to disappear from your credit file to be able to access financial products. CCJ’s remain on your record for six years, which means that during that period, you’ll be unlikely to improve your credit score.

Another way to protect your credit file is to do your research first to check that you are eligible for a loan before applying. Each credit application will leave a footprint on your credit file, which may lower your score, so looking for a credit provider that will check if you’re eligible for credit before conducting a full search is a sensible choice.

Employee Loans conducts a ‘soft credit search’ during the lender comparison stage. If we find you the right car finance package, we’ll speak to you directly to confirm if you want to continue with a full application, which will include a full credit search.

For more information, call us on 01202 688177 and one of our experienced financial advisors will be happy to help with your queries.