Do you have a very poor credit score? It is perhaps the most distressful thing that one can imagine falling to in the UK. From banks to phone companies, none of them will want to be associated with you because of the high risk involved. However, this should not be a reason for desperation because you can move from the situation to hit a better score. Here are the most important methods of raising your credit score.
Ensure to keep all the accounts open
One of the most crucial things in your credit score report is the history of credit repayment. If the repayment in any of the accounts falls behind with a long period, it pulls down the overall score. Often, many people tend to close the accounts with poor repayment history. By closing the accounts, you risk losing the good history and reducing the credit mix. It is, therefore, advisable to keep the lines open so that all the good history can help to rebuild the credit rating faster.
Borrow from a personal account
For many people with poor credit score, the main question is; how can you develop a good history when no lender wants to be associated with a risky party? However, you can jump this hurdle by borrowing from a personal account. This means depositing some cash in your account and borrowing it. Because the respective bank is not taking any risk, the arrangement will be supported to help build a good history. Note that the focus should be demonstrating your repayment capability over time.
Correct errors in personal credit reports
Though all financial institutions in the UK mainly rely on the credit rating to establish the risk worthiness of a client, you will be surprised to realize that most of the reports contain a lot of errors. But why should your report contain errors?
All the credit reference agencies in the UK do not have access to your information directly. Rather, they rely on third parties to collect the info. For the credit reference agency to know about your accounts, credit mix, and other details, they have to gather them from banks, insurance, and other financial institutions. If the third parties are late to submit data, provide info with errors, or omit the details, there is a risk of the credit score being affected. It is, therefore, crucial to get the personal credit report to check for errors and have them rectified to give the right score.
Ensure to adopt a good strategy to clear outstanding debts
The outstanding credit accounts for 30% of the credit score. If you have a very poor score because there are several lines of credit such as bank loans, mortgage, student loan, and others, you need to get out as fast as possible. The best strategy is using an appropriate plan to take the debts head on and knock them one after another. For example, you might consider paying the minimum balance for all the credits every month and using additional cash to clear the debt with the lowest balance as fast as possible. This method builds momentum and can help you get out of debt within a very short time.