Boosting Your Credit Score

So I'd thought it'd be of some value to expose the myths regarding credit score.
If you're unfamiliar with the credit score, it's a way from lenders to check on your previous credit history so that they can decide whether or not to approve you for a mortgage, home loan, credit cards etc.

A high credit score means that you are a relatively safe risk for lenders, and they'll be more likely to lend you money if you have a high score.

A low credit score, implies that you've got bad credit history and you are seen as much more of a risk. Therefore, lenders may be more reluctant to give you further credit.

Where does your credit score comes from?

A lot of the information on forming your credit score will come from the application form you fill out. It will also come from how you've managed loans in the past, and data from your personal bills will be used (anything from mortgage to phone or utility bills). If you've been bankrupt or had to use an IVA, these will stay on your credit report for 6 years.

Your credit score will be calculated differently by different providers. Points will be assigned based on the information gathers, and your credit score will be a collected tally of all these points.
Your credit score will fluctuate according to your current circumstances. For instances if when you come to apply for credit, you've missed a payment on say your credit card bill then you will get a much lower score than if you haven't defaulted and you come to apply.

If you're preparing for an application, it's worth knowing your score beforehand as you can work on areas you need to perhaps boost in order for your application to be successful.

So here's some useful tips and techniques to boost your score:

• Close any unused accounts. Your current commitments will be based on the amount you could potentially borrow, and not the amount you actually owe.
• Keep up to date on all payments. An obvious one, but you'd be surprised how many people let things slip and then go to apply for credit. So make sure all bills are paid promptly
• Pay attention to joint bank accounts. If you have an account with an ex-partner, then make sure you close it. As your names could be linked on the credit score report, so if you're partner has financial problems, this will affect your score.
  
• Register to vote at your current address. Lenders use this information to provide confirmation that you live where you say you live.
• Check for errors on the form, even minor clerical errors can affect your score. Entering incorrect information will give the wrong impression and change your score for the worse
• Don't lie. For a starters you'll get found out sooner or later by lenders, and it's fraud.
  
• Don't make too many credit applications. Each application that you make is recorded, make too many and lenders thing you're either desperate for money or that your committing credit fraud.

Follow these steps and in no time at all you'll be on your way to a better credit score.
Hope you've found this useful.