If you have earned a poor credit history over the years, it can be hard for you to take out the financial products you need e.g. loans, to create a better life for yourself and build up a business. But do not worry, there are ways to tackle this issue. Here is Turner Little’s guide to improving your credit score.
Intro to credit scores
Your credit score serves as track record, documenting your history of meeting your financial obligations. For example, it shows whether you have made your loan repayments within the agreed time frames. Your credit score can be accessed by financial institutions such as banks, so if it is poor, they may turn you down when you apply for financial products, seeing you as too much of a risk.
There are two factors which influence your credit score. The first is your payment history, which determines 70% of your credit score. This tracks whether you make repayments, ranging from mortgages to loans, on time. The second is your credit utilisation ratio, which shows your history of taking out and managing credit, via products such as credit cards. The lower your score here the better, as it shows that you can manage credit wisely, and financial institutions like you to have a score of 30% or less.
Knock-on affect
It is important to remember that your credit score is not static. It changes over time, to reflect your money management history accurately, and more emphasis is placed on your recent activity, meaning that it is possible to improve a poor credit score. If you wish to achieve this aim, however, it is critical that you understand how certain actions can influence your credit score in positive and negative ways.
A credit score can be a bit like a good reputation – it can take years to build, but a second to break, and even one miss-payment or irresponsible action will do the trick. We should note, however, that it is easier to rebuild your credit score in some cases than in others, depending on the circumstances. If you have simply missed a bill repayment for example, you can recover in a relatively short amount of time, but if you have declared bankruptcy, it can take up to ten years to wipe it from your credit score.
Build your reputation
The key to improving your credit score, is showing that you can manage your money responsibility. The way to recover from a miss-payment, for example, is to repay all your bills on time for an extended period of time. It can be a good idea here to open a basic bank account – which as experts in banking Turner Little can help with, to avoid racking up fees and show you can manage your cash carefully.
There are various other actions you can take. It is often handy to open, but not use credit accounts, to lower your credit utilisation ratio and if you do use them, pay the balances off on time – or even early if possible. You should also check your credit report and flag any inaccuracies straight away, so they do not harm your financial reputation. Also, safeguard against identity theft by monitoring all of your accounts for signs of fraud, so criminals cannot steal your money and damage your credit score.
Credit score correction
As experts in this field, at Turner Little we can provide the credit correction services that you require to improve your score, allowing you to access financial products. We will strive on your behalf to challenge, correct and remove any inaccurate or harmful information on your credit report, and we can also obtain a record of your credit files, helping you make the positive changes needed to boost your score.
We understand that if you run a business, your needs may be different than if you are just looking to enhance your own individual credit score. This is why we also provide separate personal and corporate credit correction services, providing the bespoke solutions you need to address the problem. For just £125, you can access a full company search and analysis through our corporate credit correction service, giving you the insight you need to improve your firm’s credit score and manage cash flow!
