If your credit score is low, you may think it’s impossible to rebuild it. However, not all hope is lost! There are many ways in which you can rebuild your credit score! Improving your credit score isn’t easy or hard but it does take time. There are many things you can do to improve your credit score but you need to show you’re reliable and consistent more than anything. Refused Car Finance are a bad credit car finance specialist who help people to rebuild their credit score and increase their chances of getting accepted for car finance. Refused Car Finance have compiled a list of the easiest ways to rebuild your credit score when applying for any type of loan or finance!
Check your file
The first thing you should do is check your credit file to see where you currently place, this helps you get a better idea of where you’re at and if you need to rebuild your score. You need to check your file to make sure all your details are up to date and that all your previous history is correct, as there could be something negatively impacting your score.
Register on the electoral roll
This is one of the easiest and most effective ways to boost your credit score. When you register on the electoral roll, you are confirming to lenders that you are who you say you are. It also lets them know your address history and how long you have lived there. Lenders tend to favour applicants who don’t move round as much as they are seen as more ‘settled’.
Pay all your bills on time
It might seem obvious but this is a perfect way to improve your score! It’s crucial to your credit score that you can pay your bills on time. A lender can see that you can be trusted to make all your repayments on time.
Reduce your debt
Before you start applying for any loan or finance, you should look at any current debt you have. Could you wait a few months and pay off any existing debt before applying? This would put you in a better financial position. It also reduces the burden of how much debt you have to pay back.
Close any unused accounts
This can include old bank accounts, credit cards or even store cards. Lenders will look at the amount of credit you have available to you, the more you have may indicate that you could get yourself into more debt or that you can’t handle any more. Over the years, you may have taken out credit cards, store cards, mobile phone contracts and direct debits but if you don’t use them anymore, get rid!
Check you’re not linked to anyone
If you’ve taken out credit with someone else in the past, you may be financially linked to them. You should inform the credit agency of any financial partners that you are no longer linked to. If they have a bad credit rating, this could drag your score down. Alternatively, if you are applying for finance, a joint application with someone who had good credit can strengthen your application.
Don’t apply all at once
If your credit rating is bad and you get rejected for car finance, this can negatively affect your credit score! If you make a number of applications in a short space of time, it can look like you are desperate for any old credit and will mean you are less likely to be accepted. The best thing you can do is do your research, spread out your applications and check your chances of being approved with a ‘soft search’ which doesn’t harm your credit file.
Borrow what you can afford
If you get accepted for a loan or finance, only apply for what you can actually afford to repay. Don’t sell yourself short each month. If you fail to make repayments, this can negatively affect your score in the future. Make sure any credit you take out, you can actually pay back.
Use a credit card
A credit card can be a great way to rebuild your credit. By managing the credit limit effectively on a credit card, it shows that you can be trusted when making repayments. Just make a few payments and pay it back under your agreed monthly payment terms!
Do your research
As with anything you do, you should always do your research. Especially when it comes to your finances! As we have mentioned, it’s not a great idea to make lots of applications. Before you apply, do your research on the company first. Make sure they’re fully regulated by the Financial Conduct Authority and read their reviews. Most companies also allow you to check your chances of being approved with a ‘soft search’ before you commit to a full application.