A recent report from MoneySupermarket shows that, in spite of its huge significance when applying for credit cards, mortgages, secured loans or unsecured loans 51% of us are not interested in trying to improve our credit score. However we do understand that the better the credit score is, the easier it is to access credit at more competitive rates.
The report highlighted confusion over which factors impact credit scores. With 27% of 25-44 year olds believing that your credit score merges with that of your partner when you get married. That is not true. Furthermore, many people believe that credit scores improve with greater wealth.
Thus the youngest in the poll (25-44 year olds) are most likely to know their credit score, while those over 45 are considerably less likely to understand the benefits of a good rating. Around half of those under 44 are taking steps to improve their rating, compared to only 38% of those aged over 45.
Consumer affairs spokesperson at MoneySuperMarket Rachel Wait commented: “Our results show over half the nation are completely unaware of what their credit score is, and less than half are taking active steps to improve it. Having a good credit score means you’ve got a better chance of being approved for credit cards, loans and mortgages. Accessing your credit report allows you to better understand how likely you are to be accepted for products before you apply, reducing the risk of being rejected, which can make it harder to get credit in the future. There are a number of ways to improve your rating with minimal effort, such as remembering to pay key bills on time or registering on the electoral roll, which provides proof of address.”
Top five tips to improve your credit score
- Always pay your bills on time as missed payment can leave a black mark on your file that can impact upon your credit rating for years.
- Make sure that you are on the Electoral role as this proves your proof of address and is always checked by every credit reference agency.
- It is important to build up your credit rating by actually using credit! If you have never borrowed before then you will have no credit history for lenders to check.
- Close any unused or old accounts that you may have. A large overall credit limit, even if you don’t use it may be seen as to high a risk for some lenders.
- Always check your credit reports accuracy. Sometimes there are mistakes made, and these can usually be rectified fairly easily.