Five Ways To Increase Your Credit Score

When I first bought my old flat, back in 2012 I didn’t really think too much about my credit score and it wasn’t until I had conversations with my financial adviser that I realised the impact of everything I did. Thankfully my credit score was pretty good back then but ever since it’s something I’ve been interested in. Me and Luke knew pretty early in our relationship that we wanted to buy a house together and it’s looking like 2020 is going to be the year this happens. Your credit score is a huge part of how banks will choose how much to lend you and at what rate so it’s important to get it to the best position you can. We use the clearscore app to monitor our scores as it’s free to use and really comprehensive.

Using the clearscore app to increase your credit score

Alongside telling you what your credit score is there’s so much more that the clearscore app can tell you such as how this compares to the average in both the country and your area. The report shows you where you have credit and what conditions your accounts are in which is great to know what accounts are technically open. I remember having some old current accounts or store cards which I’d not used for years and no longer had cards for but they technically still existed in my name.

The report also has an area to show things you’re doing well and things you can work on to give you a direction of what to improve. Keeping my credit score in a great position is really important to me so here are some tips on how to increase your credit score.

Increasing your credit score by physically closing down accounts you don’t use

I don’t know about you all but I have a lot of physical accounts across a number of different banks. Some of them are for different savings, ISA’s, accounts I move all my bill money into etc but it’s important to review these. A credit report like Clearscore or Experian can show you the accounts which exist under your name and it might be more than you think. Review all the accounts you have and close down the ones you either forgot you had or no longer need. One thing that a credit report showed me was a connection I had with a friend I used to have a joint account with that was still linked. With linked accounts remember that if the other person has a poor credit score it can be a negative mark against you.

How to increase your credit score by cancelling old store cards/ credit agreements you no longer use

Following on from the above point it’s not just bank accounts and credit cards you should be getting rid of but other credit accounts. I opened an Argos card when I was 18 just to build a credit rating (and to have longer to pay off a camera purchase), but even though I’d long since ever used it and had chopped the card up it still showed as an open account. Over time I’d taken out the odd bit of store credit every so often and always paid it off but forgot to ever physically close them. So I went through and called up or went online and properly cancelled the ones I no longer needed. This is a good way of showing less on your credit score.

How to improve your credit score by consolidating any debts you have

You may owe money on a few different credit cards or have a few bits of debt, but consolidating this can help you to only owe money in one area. If you have multiple credit cards transfer all the balances to a new one which has an interest free period. Or think about taking out a small bank loan to pay off all the smaller bits and then you only owe money here.

Having just one thing to pay off will make it feel more manageable and mean you can work out how much to pay each month in a better way.

Paying more than the minimum each month off your debts can help boost your credit score

This one relates heavily to the one above as once you’ve consolidated your debts you’ll want to work out how to clear them off the quickest. Of course, there are going to be occasions when you can only afford to pay the minimum off your credit but try and factor in paying more than that where possible.

Before you get paid create a monthly budget plan and factor in paying more than the minimum, or plan to top it up during the month if you have other income streams other than your once a month pay. Perhaps you could do a car boot sale or sell items on eBay, or take on a few extra hours on a job to funnel some more money to pay off your debts.

Using credit little and often can actually boost your credit score

If you’ve not really got any debts or you’re generally pretty good with money it’s still important to use credit in small increments. Having absolutely no credit can actually be just as bad as having no credit so use some little and often. When I first turned 18 this is what I did, I’d pop little bits on my credit card and pay it straight off. By doing this you’re showing that you’re paying back your credit in a timely manner so this, in turn, increases your credit score.

Do you think about your credit score?

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