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How To Improve Your Credit Rating Quickly

If you have a low credit rating, or you know someone who does, it can feel like a difficult problem to surmount. There are many lenders and companies who don’t look kindly on those with low credit scores, and having a low credit score can impact your ability to get a mortgage, leaving you in the rent trap for an extended period of time. Put simply, there are many reasons why having a low credit score is not desirable.

There are, however, ways to increase your credit score. It’s difficult to do so quickly; many of these methods may require you to be in a better financial situation than you’re currently in, and some of them take time. With that said, it’s possible to turn your credit score around in a relatively short space of time without too much hassle. We’ve gathered together a list of ways you can improve your credit rating quickly and simply. If you don’t know your credit rating and want to check, there are several services in the UK which will allow you to do so, including Experian, Noddle and others.

Pay off debts 

We know this one might sound a little obvious, but paying off debts is an excellent way to increase your credit rating. Lenders and companies like customers who have a proven record of incurring debts, then paying them off; it’s actually preferable to do this rather than having no loans or credit on your record at all. If you’re applying for credit, it’s good for companies to see past form, as if you’ve never had a loan or credit then your ability to repay cannot be assessed. With this in mind, look for any debts you still have outstanding and try to pay them off as quickly and efficiently as possible. Your credit score will increase as a result.

Take out a loan 

It might sound counterintuitive, but one of the best ways you can quickly improve your credit score is to take out a loan. This only works if you’re in a solid position financially and you know you can afford to make repayments, but it’s the same logic as paying off debts: if companies can see that you’re regular with your loan payments, they’ll be more likely to extend the hand of credit to you. Credit union loans and peer-to-peer lending are both excellent options, or you could use a payday loan lender; short-term loans are great for quick credit rating improvement as their terms are much more brief than long-term loans.

Open a credit card 

One factor which positively affects your credit score is “account mix”. Essentially, companies like to see variation in terms of the credit you take out. It looks good to have a healthy mixture of different credit types because it means you’re not constantly in danger in one particular area, and because you’re aware of the different types of credit available to you. All kinds of credit counts in this field, from student loans to automobile loans to mortgages. Opening a credit card is a great way to increase your account mix factor, especially if you don’t already have one open. Just make sure you can make repayments.

Be regular 

Making regular repayments is the number one way to improve your credit score. Unfortunately, this one isn’t really as much of a quick fix as you might like, because it’s going to take time to adjust your payment schedule so it’s satisfactory. With that said, even though it might take a while, it’s definitely an excellent way to improve your credit rating. Companies like to see you making regular repayments, as it indicates financial stability and a sound, organised mind. Take a look at your finances and try and rearrange repayments to make them more regular, and your credit score can only go up as a result.

Create a personal budget 

This one isn’t so much a way to directly improve your credit score as it is a lifestyle tip which will have a knock-on effect. Creating a personal budget can really free your mind when it comes to your finances; you never know where you might be spending money that you don’t need to spend. Taking stock of everything you earn, as well as your expenditures, will give you a more complete picture of your financial status; if you’re more aware of how your money is going, then you can reallocate funds to make repayments on existing loans easier, or if you’re doing OK then you’ll realise you’re in a great place to take out a loan and repay it reliably.

These are just a few ways you can improve your credit score quickly and easily. There’s no perfect solution, but by practising a mixture of these methods, your credit score will be better before you know it.

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