If you’ve ever applied for a loan or a credit card you know how important your credit score can be.
A good credit score doesn’t just give you access to personal loans and mortgages. A high credit score often means you’re able to borrow money at much lower – and more affordable – interest rates.
But if your credit score is more on the low side, it’s not the end of the world.
There are ways to improve your score from fair to good without having to juggle around a lot of debt.
These 3 credit score boosting strategies and tips are going to help you get your credit record back on track.
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3 Simple Ways To Quickly Improve Your Credit Score From Fair To Good
How To Improve Your Credit Score Using Your Credit Card
You can improve your credit score by showing lenders how responsible you are with your current lines of credit.
One of the best ways to do this is by using your credit card regularly, but cautiously.
What counts as cautious spending? Using your card to make small purchases such as travel costs, lunches, coffee orders and so on.
Why? Because credit agencies calculate your credit score using a formula called the Credit Utilization Ratio.
Calculating your Credit Utilization Ratio involves a fair bit of math, so we won’t get into the formula here.
But this is all you really need to know; it looks better on your credit report when you only ever spend a small portion of your credit card limit.
What counts as a small portion? Ideally you should try to use 30% or less of your total credit card balance each month.
And finally, this strategy only works if you remember to pay off your credit card balance – in full – every month.
How To Improve Your Credit Score Without Using Debt
You don’t always need to run up a line of debt if you want to improve your credit rating.
If you’re a renter then your monthly payments could help to raise your credit score.
Experian has partnered with the Big Issue Invest to launch a free program called The Rental Exchange scheme.
Whether you live in social housing or you rent privately, you can add your rent history to your credit file.
How To Improve Your Credit Score With No Credit History
In some instances you can find yourself with a low score simply because you’ve no credit history to speak of.
In these cases the solution to improving your credit history is quite simple… you need to build one.
Here are a few tips to building your credit history;
- Sign up onto your local electoral roll (contact your local authority to learn how you can get on the voting register).
- Apply for a credit card (but be careful not to apply for too many credit cards in a short space of time)
- Get your name onto one or two utility bills (such as a mobile phone contract or an Internet Service Provider bill).