How to improve your credit score

Why you should improve your credit score

Your credit rating is important as it indicates to lenders how much money you can borrow as well as the amount of interest they should charge you. Banks and lenders want to know that they can trust you before offering you finance options. In many circumstances, a bad credit history can affect your ability to borrow money, so you should avoid doing anything that might negatively affect your credit score. Here we have included some of the things that impact your credit and how you may be able to improve your credit score.

Some of the things that might impact your credit score are:

  • High levels of debt or if you are in a DMP, Trust Deed or IVA
  • Missing or making late payments on anything owed including bills, mortgage payments, loans or credit cards
  • Open credit card accounts that you don’t use
  • CCJs (County Court Judgements)
  • Having previously been declared bankrupt

Apply for a loan from a bad credit lender

Bad credit car finance is designed for people who have a poor credit history. If you fall into this category you may find that lenders with low-interest rates will refuse you a loan. If you are suffering from a bad credit history, a hire purchase agreement may help to improve your credit score.

Although it seems counterproductive to take out more credit when you’re already in debt, a finance agreement with a specialist bad credit lender can help you improve your financial situation over time, providing you ensure you pay back the money you owe on time each month.

Apply for car finance

Other ways to improve your credit score:

Pay off existing debt

If possible, pay off your existing debt and ensure you make all future payments on time. This will show lenders that, while you might have previously been in debt, this is no longer the situation you are in and can now be considered a trustworthy borrower. If you choose to use any savings to help pay off debts then make sure you still have some money set aside for emergencies to avoid getting into debt again.

Be cautious when using credit cards

Cancelling any credit cards that you no longer use is a good starting point to help improve your credit score. If you don’t have a credit card then taking one out can help to increase your credit rating. This is providing you use it and pay it back monthly. There are also credit-builder and pre-paid cards available that can help build up your credit score, but be aware that the interest rates for these are typically quite high.

Get on the electoral register

If you’re not already on the electoral roll then it’s essential that you register as soon as possible. Although it’s not compulsory to vote, having your details on the electoral register allows lenders to verify your identity and address details easier which can have a positive impact on your credit score.

Check your credit report for mistakes

Although it’s unlikely that there will be mistakes on your credit file, it does still happen. If you see any mistakes you can challenge them by making a complaint to the credit reference agency. They will then have 28 days to remove the information or explain why they don’t consider it a mistake. You can also get in touch with the lender that is responsible for the entry as they will have provided credit agencies with this information.

FCA Regulated – We treat you fairly!

Red Potato is both authorised and regulated by the FCA (Financial Conduct Authority) and fully adhere to the TCF (Treating Customers Fairly) guidelines. At a representative 29.9% APR the finance we arrange is designed and competitively priced for people with a bad credit history or other financial problems.

With Red Potato you can be confident that our associated lender will base its lending decisions on your current circumstances and won’t offer any finance to you that they anticipate you won’t be able to afford both now and in the long term.

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This website is operated by Premium Plan Limited. Red Potato is a trading name of Premium Plan Limited, which is registered in England with Company No 05977118. Registered office: Kempton House, Kempton Way, PO Box 9562, Grantham, Lincolnshire, NG31 0EA. Premium Plan Limited is authorised and regulated by the Financial Conduct Authority. The Red Potato name and logo are trademarks of Totemic Limited. Premium Plan Limited is a member of the Finance & Leasing Association (FLA).