When it comes to your personal finances, there are few things more important than your credit rating. This statistic can dictate a whole range of things about your financial life. You won’t be able to borrow money as easily, your insurance premiums might go up, and you could find yourself paying more for services thanks to a low credit rating. It’s not a good idea to leave your rating low if you’re struggling.
Thankfully, there are ways to drive up your credit rating. Some of them are fairly orthodox, while others might not occur to you naturally. It will take time and effort on your part, but even if your credit score is severely low, you should be able to pull yourself up and get back on track. Here are 7 easy, fairly quick ways you can improve your credit rating.
- Take out a loan
“Take out a loan?” you say. “It’s taking out a loan that gave me a bad credit rating in the first place.” While that may be true, taking out loans can actually be a good way to improve your credit score. If you’re able to make timely, consistent repayments on your loans, you’ll find your credit rating rising. Make sure you find yourself a good, reputable loan provider – loans2go is a great option – and you’ll be looking at a much-improved credit rating in no time. You’ll need to make sure that you can make repayments, though, because if you struggle with that aspect of your loan then you might find your credit rating depreciating even further.
- Make good investments – such as bitcoin
If you’ve managed to pull yourself out of serious debt but you’re still struggling with credit score, one of the best ways you can improve it is to invest. There are plenty of sound, solid investments you can make to improve your credit score. You could, for example, consider investing in bitcoin. This modern, forward-thinking option allows you to set yourself up for the currency revolution and shows you to be a progressive person when it comes to investment. You’ll improve your credit score simply by making money and being able to pay off your debts. Use websites like zycrypto to show you where and how bitcoin can make you the most money and you’re golden.
- Pay off debts
This might sound obvious, but one of the most powerful and effective ways to fix your credit score is to pay off your debts. If you’ve got any lingering financial obligations, they will be negatively impacting your credit score and likely causing you no end of worry. You should prioritise the debts that are the most significant and the most urgent. It’s not an easy process to decide how to prioritise debt, but it’s necessary if you want to make a dent in your credit score. The more debt you repay, the higher your score will climb. This should also ideally be done before you take out a new loan, because you could just be compounding your troubles.
- Open a credit card for bad credit
There are lots of credit card options out there for those who find themselves with a low credit score. These cards typically have sweetener offers like a 0% three-month spending period, allowing you to get on top of your debts and manage your money more effectively. Once you have this card, you can use it to shuffle your debts around, pay off the ones that are giving you the most trouble, and get your credit score up. Companies like to see that you’re able to make timely repayments on credit cards, and if you don’t have any then they can’t see this. Make sure you research which card – and which offers – are right for you before you go down this road.
- Take out a prepaid card
Here’s how a prepaid card works. You load cash into the account as you would with any other. You’ll pay a small fee each month to keep the account open and to have money in it. After a certain amount of repayments, the prepaid card company will begin to make positive reports on your credit score. Eventually, once the card is repaid in full, the prepaid company will report the card as a completed loan, improving your credit score and placing a repaid loan on your account. Effectively, you’ll be paying around £80-£100 in a year so that your credit score can be improved. If you’re finding it hard to borrow money, this is definitely an option you could go for.
- Dispute inaccuracies on your report
If you think that your credit score contains inaccuracies, it’s extremely important to dispute them. It’s entirely possible that a lender is either accidentally or purposefully misrepresenting or misreporting your information to the credit bureau. If that’s the case, you need to fix that issue, and fast. It won’t go away by itself, and you’ll have a black mark against your credit rating that you can’t easily fix. By disputing your credit inaccuracies, you’re not only potentially driving up your credit score, you’re also showing that you’re aware of and alert to changes in the report. Just make sure you’re engaging with the proper process as recommended by your credit bureau.
- Don’t apply for too many credit products
Applying for credit products left, right, and centre can tell employers that you’re desperate for credit and unable to pay for things outright. Before you make a credit application, ask yourself if you really, really need it. Are you applying for this on credit because it’s easier, or because you don’t have the cash? If it’s the former, consider paying in full instead. Too many credit applications can seriously impact your credit score. Make sure not to be too blasé about credit and you’ll find your credit score improving as a result.