Your credit score as either an individual or a business can make a big difference in your life, as it will decide if you are or aren't able to apply for credit cards, loans, or purchases on finance. If you're not able to access these types of credit, it can be challenging to make important purchases such as cars, furniture, or even get a mortgage for a house. Some clear steps can be taken to improve your credit score, but it can also be ruined if you make some poor financial decisions. One of the most common ways that people get a black dot against their credit rating is by overusing and missing out on credit card payments. If you miss several payments or even default on a loan or credit card, it will become very difficult or almost impossible to get further credit in the future as you're seen as a risky person to lend to. If this happens to you for any reason, there are several key steps to take to increase your credit rating again.
Prove your address.
One of the most simple things you can do to start improving your credit rating is to prove where you live. This is done by applying to the electoral register in your local council to make sure you're on the records. This can easily be done by registering to vote. This can be done if you live on your own or if you live with friends or family.
Start to build your credit.
The next step is to start to prove your trustworthiness as a borrower again. If you have very bad credit, then this can be difficult as the mainstream credit card and store card providers will most likely not accept you. There are several banks and other loan companies that specialize in offering credit cards for people with poor or no credit. These can be a good place to start to rebuild your credit. Visit this link for high-risk bank account providers. Be aware, though, as the interest rates on these cards are especially high for people that don't make their payments.
Make your payments on time.
As mentioned, the real way to start to build your credit score is to prove that you can pay back your lending on time reliably. The best way to do this is to set up a direct debit from your bank account that will automatically wipe any cash you've spent on your credit card.
Try to have a low credit utilization.
Your credit utilization is the percentage you use of a pre-determined maximum amount of cash you can borrow. For example, if you have a credit card for £1500 and you use £750, this is the utilization of 50 percent. Keeping this percentage low is seen as positive by lenders, so if possible, try not to max out your credit cards regularly if you're trying to rebuild or build your credit rating.
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