Improving Your Credit Score

The World of Credit

Credit card, credit score, credit limit, credit line, the world of credit cards can seem overwhelming at first. However, what might at first appear daunting is really quite simple and finding out about it is even simpler in the digital age. Sites like Clearscore are a great help in explaining how it all works.

What’s a Credit Score?

With a credit card comes a credit report, with that report your credit score is calculated. Paying back loans is important and your credit score gives a strong indication of how reliable you are to lenders. “The score is useful because it gives you an idea of how the lenders view you. Most importantly, it allows you to keep an eye on changes to your score, which reflect the changes in your report. For example, missing a payment will lower your score but paying off a loan might improve it.” If you need further explanation have a lot of useful and valuable information on it, it’s where the quote is from.

How do I Improve my Credit Score?

Obviously having a higher credit score is a good thing, so how do we drive it upwards? There are a range of ways to do this using only your credit card and they’re all very straightforward. Starting out it’s better to make them habitual as recovering from credit mistakes is much harder than getting it right first time.

Start by keeping an eye on your credit report going forward. Check it for errors, things like incorrectly listed late payments. You can dispute errors with the Credit Bureau. Credit card use, both short and long term, needs to be carefully considered. Avoid spending what you can’t pay back every month. Pay down your credit card debt and ideally keep your balance cleared by the end of each month. Reducing your debt and keeping it low demonstrates to lenders that you can reliably pay back what you borrow.

Set up reminders, your calendar and smartphone are good places to start, missing payments will damage your credit score and it’s something to be avoided at all costs. Some banks will offer to send you reminders themselves. Opening more credit cards can increase your available credit but too much too soon is a bad thing. Expand your credit when you can use it within reason and not just because you can. MoneySuperMarket offer a range of advice that support these points, you can find it here.

Even if you won’t have much use for it right away having one credit card to build up credit score for the future can be immeasurably useful. Whether it’s for paying bills, buying property and getting a mortgage, your credit score will very likely matter to you one day.

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