Saving for a home can be hard work. Most people already have their budgets stretched to cover living expenses in the UK, let alone put enough aside each month to afford a property. Adding to this are the rigid guidelines set out by banks to decide who is a suitable candidate for a loan. Banks base this decision on your credit rating. In theory, the higher your credit rating is, the more reliable you are with money and the more capable you are of handling debt.
In light of the past decade’s economic woes, many banks require you to have a near-perfect credit rating before they offer you a loan. They don’t want to risk lending to someone who may default on a payment. This means that many people are now faced with the possibility of rejection and are looking for how to improve credit rating.
Banks want to see proof that you can handle debt. As a result, managing a credit card account is a great way to improve your credit rating. If you consistently make payments on time, this shows the bank that you’re a trustworthy candidate. Nonetheless, banks are extremely cautious when considering credit card applications too. While this may seem like a lose/lose scenario, there are reliable credit providers, like aqua credit card, who follow less stringent criteria when considering a credit card application. These providers are specifically there to help you build your credit rating, which in the long-run will make it easier for you to get a loan.
Credit building credit cards UK usually come with competitive interest rates, manageable monthly repayments and flexible payment dates, making it easy to manage your debt. aqua even has a 24-hour helpline and SMS reminders with their products to ensure that you never miss a payment.
Aside from proving that you can manage your finances, there are other simple tactics you can employ to improve your credit rating.
Sign up to vote
The electoral roll is an important verification tool for credit reference agencies and lenders alike. When you apply for a loan or credit, financial institutions check your name against the electoral roll to ensure you exist and your details are correct. This is also a way for banks to prevent identity fraud. Hence, it’s vital you’re listed on the electoral roll.
Get a copy of your credit report
All of your credit history is listed in your credit report. Credit reference agencies, like Experian and Equifax, hold this information and give it to whichever lender you have chosen to apply for credit with. Any mistakes or discrepancies on your credit report can result in your request for a loan being refused. Legally you have the right to see your credit report and it’s wise that you do so. If there are any mistakes you need to have them rectified to ensure your credit rating improves.
Close any unused credit cards
If you have a number of credit card accounts open and unused, it’s advisable to close them. While lenders want to see a history of debt management, having too many open accounts can have an adverse effect. Credit providers consider the amount of credit you have available to you when deciding whether to approve your application. Having one or two accounts open, that you consistently make payments on, is more than enough to prove your credit worth.