Bad Credit Score: 8 Tips to Improve Your Score

Your credit score is a three-digit number that lenders use to decide whether or not they will approve your application for a loan or credit card. If you have a bad credit score, it’s likely that your application may get refused or rejected. Don’t worry, you’re not the only one who this happens to!

Many Brits face loan or credit card rejection, but the good news is that there are many different activities you can carry out in order to rebuild your credit score…

Register on the electoral roll

If you’re not already on the electoral roll, be sure to get registered ASAP as registering can make it much easier to be accepted for credit as it can improve your overall score.

Not only does it help your credit rating, but it can also speed up the loan application process – as lenders will often check who you are against the electoral roll for identification purposes.

If you’re in a situation where you’re not eligible to vote in the UK then don’t worry. All you need to do is send proof of residency to the credit reference agencies.

Check your file for mistakes

Your credit score is decided upon by all of the credit reference files that are held under your name by credit reference agencies such as Equifax, Experian or TransUnion.

Checking your files annually should suffice, however we would suggest that you perform a further check before you put in an important or major application. While it might seem like a long and tedious job, it may highlight an error in the data stored on you which could affect your application.

If you have got as far as submitting your application and have been rejected, go through your credit files with a fine-tooth comb to see if the data held against you to be wrong. Now and again, it’s possible that errors can happen, therefore increasing the potential of your loan being rejected. If you find something and get it removed, it could improve your score.

Check whether your name is linked to someone else

There’s a chance that you have a bad credit score because your name is linked to another person you’ve previously shared a financial product with. Financial products that you might be linked to someone on could be a joint mortgage, a joint loan, a joint bank account or, sometimes, a utility bill.

Being financially linked to someone means that when you’re being assessed, the lender is also likely to assess the other person before they decide whether to accept you. If the person you are linked to has a poor credit history, then it’s in your best interest to keep your finances separate to theirs, so you don’t feel the potential negative financial effects.

Pay your bills on time

While it might seem like an obvious one, you need to pay your bills on time. If you went through a period of time where you missed payments and now have a bad credit score as a result, the best way to build it back up is not to get in that situation again.

Every time you meet a payment, this goes in your file and counts towards improving your score because it shows to future lenders you were able to meet payments and, subsequently, you’re less of a risk to lend to.

Pay off debts

If you’re in debt, then there’s a good chance you have a poor credit rating.

Create a plan of how you’re going to start paying these debts off before you apply for any other credit. Paying off the existing debts will help you to rebuild your credit score, which will help get your application approved.

If your debts have become unmanageable, then check out our information on a debt consolidation loan and see if this is an option that could help you.

Don’t apply for a credit card for no reason

Many people will apply for a credit card and not spend on it, thinking that this will go towards building them a good credit score. However, the chances of it actually improving your credit score are very small, meaning it’s not worth it.

Any unnecessary credit can harm your file in multiple ways and gives you a tempting way to overspend on and grow your debt – which is the opposite of the desired effect.

Find a guarantor

If you’re struggling to receive a loan or pay for something on credit, consider getting a guarantor. A guarantor makes a guarantee to your lender that in the case of you not being able to meet the payment, they will pay it for you.

While, of course, you should only get credit if you know you can afford to pay it month by month, having a guarantor might be the difference between being accepted and not. So if it’s an option that can help you to secure a loan and build up your credit score, see if you have someone who would be willing to do this for you.

Time your application

Getting your application approved can be about the timing of when you submitted it. Some problems can stay on your credit file for 6 years after the incident such as bankruptcy or county court judgements. Data about previous loans you’ve applied for can also stay on your file for a year if you were rejected. So if you’re coming up to the time where previous issues are going to lapse, hold off to apply until the data isn’t held against you anymore.

If you are aware that you’ve previously had bad credit, then use a tool to check your credit score before applying so you don’t receive another rejected application – making your score worse.

We hope that some of the tips we’ve given you in this post will help you to start improving your credit score. If you’re in a tricky financial place and want to find out about if you’re eligible for bad credit loans, check out our information on them here. Or alternatively, if you’re serious about wanting to get your finances in check, have a look at the Jolly Good Loans blog for other helpful money saving hints and tips.