It seems that if you want the best financial products and services at the ‘headline’ rates then your credit score has to be almost perfect. In reality most of us have an average credit score, so if you could pay to improve it would you? A new product has now been launched which offers customers the opportunity to boost their credit score, in return for a monthly fee.
The Credit Improver product guarantees to improve your credit score, providing you follow all the rules and regulations, or you can have a full refund. However with costs between £64.88 and £364.54, is it worth paying for, or can you use a credit card or unsecured loan deal to boost your score?
It works by choosing from a 1, 2 or 3 year contract, and each month the three main credit reference agencies will assess your position, and improve your credit rating. Those aforementioned agencies are Callcredit, Experian and Equifax. The set up cost is £14.99, and then a monthly fee of £4.99 for your 1, 2 or 3 years depending on which one you chose. If you want the ‘guaranteed’ cash back element then the payment is £9.99 a month. There is also a premium version available for £124 for the first 12 months, which guarantees if your score hasn’t improved then you will get your cash back, providing you have met all the conditions attached to the financial agreement which they send to you. These conditions include making no more than 3 credit applications a year, and not having any CCJs registered against you.
As well as the financial agreement, you will also receive a ‘Credit Improver Book’, which is full of hints and tips on how to improve your credit score. Examples include ensuring that you are registered in the electoral role, and keep up to date with any payments. This service is primarily aimed at younger people, who perhaps haven’t had time to build up a decent credit score, and is not suited to those with debt issues. Tom Eyre the founder and CEO of Credit improver states that ‘If you have substantial current arrears elsewhere our product isn’t likely to make as much of a difference as customers might like. As much as we would love to help these customers, we think it would be wrong for us to charge someone when we know it might not work.’
The firm operates as a credit broker, with DDC Financial Solutions providing the finance. The umbrella company, Nooli, has recently been created by Credit Improver and as the company grows it plans to create different companies under this structure.
Whilst the product says it will improve your credit score it doesn’t say by how much. So you could be paying out between £64.88 up to as much as £364.53 with the cash back guarantee option, and see little improvement. So are there other ways that you can directly improve your score without having to pay?
If you have a phone or energy contract, then making regular payments on these will help build and improve your credit score as it proves you can manage the payment. You may also wish to consider taking out a credit card or unsecured loan. An introductory 0% credit card can work in your favour, providing you pay off the balance within the specified time, and make sure your payments are up to date. There are financial products and services available to those who may have a poor or below average credit rating, use these products to prove that you can be a responsible borrower. Subprime lenders offer deals and offers as well as the mainstream lenders; ensure that you check their products to see if any suit your needs.
There are a number of things that you can do to improve your credit score. Always ensure that you are registered on the electoral role and that your address is correct, always make payments on time and don’t ever miss a payment.
Mr Eyre was asked why perhaps someone would choose Credit Improver as opposed to taking out a standard unsecured loan and he said; ‘Unfortunately, it’s becoming more common to find that people are being rejected through having little or no credit history. Our product wouldn’t be necessary for people who are accepted for fairly-priced, mainstream credit. The major problem facing people looking to improve their credit scores is being given access to credit in the first place in order for them to prove they can manage it responsibly.
‘Lenders need to see that a potential borrower has a history of managing credit, and this can cause a major problem for those with little or no positive borrowing history.’
‘There is another option, which is to get a credit card and make full monthly payments. We would always suggest that if a customer can get a credit card, and they are sure they will not get themselves into unmanageable debt, they should take that option.
‘However, most sub and near prime credit card companies will decline over half of their applications, so these people do not have the option of getting a credit card. That is where we can step in and help.’