Having a good credit score has become very important for everyone as it is an indicator of your financial health. A good credit score provides you with many benefits, and at the same time, having an exceptional UK credit score easily qualifies you for a house and a personal loan. By watching your credit score, the loan company can establish the interest rate and amount of loan they can offer.

You should also know that banks and financial institutions will not grant personal loans and credit cards to people who have low credit scores if they do not have faith in their ability to repay the loans. Hence, improving a credit score is not a cakewalk; however, you can have a good credit score by following these proven tips and tricks.

Here are a few tips and tricks you can use to improve your credit score:

• Have a look over your credit report 

You must keep checking your credit score monthly and review it carefully. You can even check your report from each credit bureau as they provide a free credit report once a year. Checking your credit report regularly can help you to identify any errors on it. Due to this, you will be able to fix it quickly. Hence this is one of the easiest and essential ways to improve your credit score.

• Check the error 

Your credit score can fall even if you have minor errors like misinformation, spelling mistakes, misspelt names, or incorrect information. If this occurs, it might also be a reason that your identity might have been stolen. Minor errors can also be an indicator that you have been suspected. Therefore, it is necessary to identify these errors by approaching CIBIL and have them corrected.

• Pay all your debts equally when the time comes.

The criteria used to determine a credit score include revolving (credit cards) and tradeline (mortgages) debt. Hence  It doesn’t matter how low the interest rate is on your line of credit. You should never neglect the payment if it means skipping another loan. Your credit score will be lowered if you keep a balance on your credit cards. You will also face a hard time getting approved for loans or new credit cards if you have a bad credit score.

• Ensure that you have a mix of various accounts.

Credit scores are calculated based on your credit cards, mortgages, auto loans, and student loans. You can improve your score by adding another element to your current mix account, as long as you pay on time. Check your credit score free from an app like Buddy score to know your insights on the current credit position.

• Never apply for multiple credits frequently.

You should never apply for multiple credit cards or loans frequently as it can represent you as a credit hungry in front of the lenders and financial institutions. Whenever you apply for a credit card or a personal loan, there will be a credit inquiry, and hence it can negatively impact your credit score. It is also suggested to apply for a credit card or loan only when you need it.

• Build a strong and lengthy credit history 

You should never close any old accounts or credit cards in order to improve your credit score, as they can demonstrate your longstanding association with the banking institution and show a long repayment history. Hence, You will lose your old credit records with the bank if you close your old credit cards.

Also check: Do You Know How A Low Income Affects Your Credit Score?

As you may also know, if you do not have a credit history, it will be estimated after three to six months from the start date. The longer and good your credit history is, the higher your credit score will be.

Summing Up

It is important that you know that your credit score won’t improve overnight, but it can be improved over time with continuous efforts. For improving your credit score, you should keep a close eye on your credit report, credit lines, and expenses. It is also suggested to make timely payments as it can also be one of the reasons for the downfall of your credit score. However, following all the steps mentioned above carefully will help you boost your credit score over time and increase your creditworthiness.