5 Unusual Ways to Improve Your Credit
Your credit score affects a lot of things in your life: from credit cards to loans, and even mobile phone contracts and finance agreements.
It is important that you try and keep your credit score as high as possible. After all, a good credit score will make you more likely to be accepted for any type of credit, and the higher your score is, the better interest rates you’ll be offered!
A poor credit score can leave you in some tight situations, where you may need to rely on bad credit loans or a no credit check loans process. The interest rates on these types of lending is less than ideal, and in some cases can cost a lot more than the initial loan amount.
With that said, there are many ways for you to improve your credit score. Most of these are obvious: pay your bills on time, don’t default on payments, etc. We know that this is, in practice, sometimes much easier said than done, so here we’ll be looking at 5 unusual ways that you may be able to use to improve your credit score!
The Electoral Roll
Perhaps the most unusual, and in some cases the quickest way of improving your credit report, is by ensuring that you are on the electoral roll. If you haven’t already, you should make sure that you’re registered to vote!
Aside from allowing you to engage with the countries politics, registering yourself to vote allows credit reference agencies to access further verifying information, regarding your name, age and address.
Creditors will see this information, and can use it to accurately prove whether any application you make is fraudulent or genuine, and it can be used to match up any information. Lenders are also more likely to approve an application if they can see that you’re listed on the voter’s roll!
By joining the electoral roll, you’ll also save time on the majority of credit applications, as certain lenders will require less physical proof of identity.
Just a side note: many people move house, and forget to re-register. You MUST register any change of address to benefit from being part of the electoral roll.
Don’t Close Old Accounts
Another underappreciated method of boosting that credit score is keeping your old unused credit cards active!
Your credit score is composed of multiple different factors – not just whether you make your payments on time. In fact, one of the biggest impacts on your credit file is utilisation, which is essentially how much of your available credit do you use?
When you close your older and unused credit cards, you’re effectively decreasing your available credit. This will, in turn, increase your utilisation, as you will be shown to have used a higher percentage of your available credit.
It is not recommended to open any new cards in an effort to improve your credit, as you may be subject to a hard credit check, and rejections will affect your credit file in a negative way.
Make Multiple Payments to Your Credit Card Every Month
A further misconception by those of us who pay off credit cards is that paying the minimum payment each month, by the due date, is sufficient enough to maintain a high credit score.
Paying your due balance each month is proven to be the best way to improve your score, and in some cases – especially with lower balances and higher utilisation – this is more than enough to maintain high credit scores.
Understandably, some of us do have a higher utilisation rate, and it isn’t always possible to keep your balance below the recommended 30% threshold. In this scenario, making more than one payment to your credit card or loan each month can improve your credit history, as it shows a willingness to reduce the balance.
Avoid Online Quote Comparisons
We’ve all been there. A new car? A new house? Or just a ‘what if’ on that Lamborghini you’ve always wanted?
Be careful when you use any online quote comparisons, as some of them may impact your credit file in a negative way.
A quote comparison website can act as a broker, meaning they will not provide the insurance themselves. The details can then be passed to a multitude of insurance providers, who may individually perform a search on your credit file.
This is not always the case – make sure that you read the small print, and check to see if there is a ‘no credit check’ guarantee. Alternatively, you may wish to contact an insurance provider directly – they may even give you a better price!
Don’t Switch Creditors!
The last thing we’ll look at is switching creditors. It may sound like a great idea to switch suppliers – you might have been offered an irresistible introductory rate!
This is not made to help you make payments and improve your credit score – it’s for a business to attract new customers, and ultimately make more money.
In actuality, one thing that reference agencies will look at is how long you’ve held an individual credit agreement for. Loyalty really does pay off, so if you can help it, it’s worth staying with the same provider(s) you’re already with rather than balance transferring or consolidating your loans.
Obviously, this is just a handful of unorthodox ways to improve your credit score, and become more financially stable – there are plenty of other unusual methods you can utilise, such as:
Reject Pre-Approved Offers.
Request for good-will removals from creditors – defaults show negatively on your credit history, so take a shot and ask the lender to remove it. It isn’t guaranteed, but it can MASSIVELY improve your rating.
Clear those small balances as soon as you can.
Return outstanding library books! The library may contact debt recovery agencies, who can record defaulted payments on your credit history.
Increase your limit – and DO NOT use it!
Remember: there’s nothing more important than proactively paying the due amount of your bills on time. This will have the biggest impact on your credit history – everything on this list will help you improve those scores, but should not be relied on as an indefinite solution.