Are you looking to build your credit score? Whether you’re fresh out of school, new to the UK, or simply haven’t had any credit history in the past six years, this guide is for you. In this article, we’ll provide five easy tips to help you gradually boost your credit score.
Tip 1: Register to vote
By registering to vote, you’ll be added to the electoral roll, which is commonly checked by companies when assessing credit applications. The good news is, it’s a quick and easy process. Just visit gov.uk/register-to-vote and fill out the form. Keep in mind that it may take a couple of months for your name to be added to the electoral register.
Tip 2: Open a bank account
Managing your money effectively and opening a bank account can positively affect your credit score. If possible, apply for a small overdraft, but use it sparingly. Aim to keep your balance utilisation below 50%.
Tip 3: Apply for a credit card to build a credit score
After showing good money management through your bank account for a few months, consider applying for a credit card from the same bank or building society. Since they know your spending habits, your chances of approval may be higher. Remember, only utilise a small portion of your credit limit and make sure to pay off the balance in full every month.
Tip 4: Get a mobile phone contract
In today’s world, a mobile phone is essential. Instead of opting for pay-as-you-go, consider getting a mobile phone contract, which not only offers better value but also contributes to building your credit history. To ensure prompt payments, set up a direct debit to pay your bill each month. A simple and low cost way to build a credit score.
Tip 5: Limit credit applications
Avoid making too many credit applications within a six-month period. Excessive credit searches could raise concerns for lenders and potentially be seen as a red flag. Instead, use tools that indicate your eligibility for credit. If you want to learn more about credit scores and how they work, click here for our article!
Follow these tips, and you’ll be on your way to build a credit score. Good luck!