How Can I Improve my Credit Score?

It can be important to try to keep our credit record looking good and you may be in a position where you are worried about whether yours is good enough. You may wonder what you can do to improve it.

What are People Looking for in a Good Score?

Your credit record will be looked at by potential lenders, landlords and employers and they will judge you based on it. Unfortunately, there is not a standard way that they all do this which means that there is a certain amount of guesswork involved. Some will want to see that you have a perfect record and have always repaid and paid everything on time but some will be happy to give a little because they may be happy for you to miss a few payments as they can then charge you more money and that will make them more profit. It can therefore be a little difficult to know what to do to impress. However, there might be a few things that will help.

What Can Potentially Improve it?

It is wise to check what your credit report says and make sure that it is correct to start with. You may find that there are some mistakes which could make you look worse, such as if you have completed paying off a loan, then it may show you still have it or it may show you missed a payment when you did not. So, look out for that and make sure that all of the information is correct on it everywhere else as well.

Make sure that you are on the voter’s role. You may not want to vote and you do not have to even if you are on it but a lot of companies will check this for the purposes ID checking and so if you are not on it, that will show on your credit record and it will put people off.

Make sure that there is a record of you making regular payments or repayments. This might be for a loan but alternatively could be utility bills, insurance and things like this. A potential lender or landlord is likely to be impressed if they can see that you are making payments regularly as it shows that you are capable of doing this and more likely to be able to make the payments that they will need you to make from them. If you do not do this, then get you name added onto some of the household bills to show that you do this but only if you are sure that they will always be paid on time. It can be worth making sure payment goes out automatically by direct debit or standing order and then you will be sure that it will be paid on time every time.

If you have a lot of loans then it might look more favourable if you pay off some of them. It could look like you will not be capable of repaying another loan or paying rent if you already have a lot of loans to pay. Therefore, if you do not have so many or do not owe so much on each of them, then this could look a lot better.

Make sure that you do not apply for lots of loans too. If you get turned down and then try another then this will not look good. It will seem like you are desperate for money and it will put off potential lenders. Try to find out from a direct lender whether it is likely that you will get accepted before applying and only apply for those that you are confident that you will get.

Should I Swap Banks?

Many people will swap banks from time to time and this might make you think that you ought to look into doing the same. It is good to start by thinking about the reasons why you might want to swap though and then you will be able to work out whether there are better options out there for you.

Current Account

Most people will take out a current account with their main bank and so if you are thinking of swapping this could be your main focus. It is important to think about what you will be looking for in a current account. It could be that you use an overdraft a lot and if you do, then you need to be careful to make sure that the rate is a good one. You will need to see how the interest rate compares to other banks. If you do not use the overdraft then this might not be so important to you but you might find things like interest on current accounts, option of paying a fee and getting benefits and other features important instead. Consider what you are getting now and whether you would like the same or whether you would like more.

Customer Service

Many people like to have a good customer service with their bank. However, what they feel is good can differ. Some people like to be able to speak to someone on the phone, ithers online and some face to face, so this will make a difference as different banks will offer different services. They will also differ in how quickly they respond and how polite and friendly they are so this is worth bearing in mind if these things are important to you.

Products Offered

It is also good to think about what other products they offer alongside the current account. Although we may very well take out products form other banks, we will often use a credit card and have a savings account with out main bank and may also use it for borrowing. Therefore, it is a good idea to think about what they might have available for you to use and whether it looks competitive with regards to interest rates and features, compared to what you are getting now and what other banks are offering.

Contact

Some people like to be able to go and speak to their bank. They like to go to a branch and deal with someone face to face. Other people like to be able to telephone someone and discuss things that way. It is also possible that you might just want to deal online as many people like banking apps and online banking these days due to the convenience. It is good to think about what might work best for you and see whether any bank that you are swapping to might be offering what you want.

It can be a big decision to make. This is because you will have to switch all of your direct debits, standing orders and payments that come in to a different bank. Although the bank should help with this, there is a risk that it might not go to plan and you will need to keep careful track to make sure that everything gets paid when it needs to be. However, it is wise not to let that hold you back if you can gain a lot by changing to a different bank. You could benefit financially but also you could get a better service as well, so it could be really worthwhile and so is well worth considering.

When to get a Personal Loan

It is always important to make sure that when you are thinking about borrowing you do not rush into things. It is really good to have lots of questions such as the above one. It is wise to make sure that you are really prepared before you borrow and there are different things that you can do to make sure that you are prepared.

Research Loan Types

It is a good idea to know about all the different types of loans that are available and what their main features are. This is important because it will ensure that you are picking the right loan for your needs. It is a good idea to think about what you might use different loans for as well. Then when it comes to a time when you need to borrow money, you will be able to easily know which loan type will be the best for you to choose.

Consider Your Borrowing Needs

It is important to make sure, when you do need money, that you consider what your borrowing needs are. You need to think about what you need and what you want form a lender. It is a good idea to think about how much money you need, how much you can afford to repay and how much you are prepared to pay for the loan. You also need to think about whether the lender is important to you as well and whether there are any features of lenders such as being well-known, having a good reputation, having good customer service or things like this which will be important to you as well.

Match to the Right Loan

You will need to then make sure that you match your needs to the right type of loan. You will mainly be looking at the amount you can borrow and how long for as well as what the repayment expectation is. Also, some loans can only be used for specific purposes. If you have good knowledge of the loan types, it should be pretty easy for you to be able to work out which of the loans will be the best option for you with regards to your specific needs.

Compare Lenders

Once you have decided on the type of loan that you need to have, then it is important to compare the lenders. You will find that they will vary in how much they charge for the loan and that will mean that it is important to compare them. You will also want to look at other features though as well to make sure that you are getting good value for money. Making sure that you can afford the repayments is really important as well and so you need to find out what the repayment expectations will be. This bit tends to take the longest as you will have to look at every lender that is offering the loan that you want and look at the things that are important to you to see hoe they match up. It can be tempting to speed up the process by using a comparison website or a review site but it is important to know that these will not show all lenders. They only have a very small proportion and so you could be missing out on a much better one by not doing research yourself. Using a search engine could be better but it will take time and it is wise to make sure that you make the time to do this. Then you can be sure that you will be able to find the lender that will suit your needs the best.

How to Repay Credit Cards

If you have one or more credit cards and you have an outstanding balance, then you may feel that you would like to repay them. It is great to want to do this and having motivation is the first step that you need. However, that may not be enough and so hopefully the tops below will help you to be able to find a way forward in repaying the cards.

Find out What you Owe and Plan

To start with you need to organise yourself. Find out how much you owe on each card. Then think about which you want to repay first. It can be wise to repay the one with the highest interest rate first but you may prefer to repay the biggest one or the smallest one first. Consider which approach will help you to stay the most motivated as this is really important. You may find that knowing you can pay a few off completely will give you a good feeling so will want to start with the little ones or you may rather tackle the biggest as that worries you the most or go with the most expensive to save the biggest amount of money.

Stop Using the Cards

You will need to stop using your credit cards if you can. It can be very difficult to repay a card if the balance keeps going up and so you need to make it easier for yourself by not increasing it. They may be the odd circumstance where you feel you have no choice but to use a card, but try to keep that to a minimum and keep them out of reach, away from temptation if you can.

Organise Repayments

Make sure that you have direct debits set up for each one to repay the minimum. Think about whether you feel you can afford to repay a bit more than this and if you can, pay extra off the card that you want to repay first. Even if it is just a tenner extra it is a start and so change the direct debit so that it is a bit higher than the minimum. You should be able to arrange that with your lender by calling their customer services department.

Find Ways to Repay Extra

It is also a good idea to try to think of ways that you can get lump sums of money to repay chunks off the credit card. This will speed up how quickly they are repaid and there are things that you can try which could help you to be able to do this.

  • Consider using any savings you might have
  • Compare prices so you do not pay more than necessary for things you are buying
  • Cut back on non-essential spending
  • Sell things you do not need
  • Work more hours in your job
  • Find some temporary or freelance work
  • Monetise your hobby
  • Take on an additional part time job

None of these options are easy, but if you are really determined to repay your credit cards then it will be necessary to make some changes. You will have to decide what changes you can make most easily and that will fit in with your situation. The more you do, the quicker you will be able to repay the cards but you need to be reasonable as well and not put too much pressure on yourself as you could burn out if you take on too much work. It is also worth remembering that as you start to repay some of what you owe, the interest you are charged will go down and you will be able to use the money that you would have used for interest, to repay some of the balance.

How to Decide Whether to Remortgage

If you have a mortgage then you may wonder whether you should be considering remortgaging. There are two main reasons why people might remortgage and these tend to be either to borrow more money or to switch to a cheaper lender. As these are very different then you will need to go through different reasonings with each.

Remortgaging for More Money

If you are considering borrowing more money it is a good idea to make sure that this is wise. Often, if our property increases in value, it means that we have the opportunity to increase our mortgage so that we can buy more things. Many lenders are happy to extend the amount that we are borrowing so that we can perhaps pay for work on the house, for example. As long as they are satisfied that we will be able to repay what is borrowed or that they will be able to get their money back by repossessing if payments are not met, they will lend more. But the borrower needs to be careful. They need to think about the fact that they might have higher monthly repayments or that their mortgage might last for longer. Either of these could be a problem and it is really important to find out whether you will be paying more so that you can decide whether this is something that you will be able to afford. You should also consider whether you really do want to be repaying for longer, if this is something that will happen, especially if you are getting older and it might prevent you from retiring early. Also, although mortgage rates are low, you do repay over a long time period, so the cost of borrowing in monetary terms could be high, so you need to make sure you calculate this and compare with other means of borrowing.

Remortgaging to Save Money

Changing your mortgage provider so that you can pay less, can be a great idea. You will need to be careful though to make sure that your current provider will not charge you a lot of money if you switch. Some lenders have an early redemption charge and if you try to repay what you owe early, they will charge you a significant sum of money to cover the loss in interest that they will see as a result of you either paying off the mortgage or switching to a different provider. So, you need to contact your lender to find out whether there will be any consequences if you move to a different provider. You may find the new lender may have a fee as well, perhaps an admin fee when you first take on the mortgage so that is worth checking out. You will need to calculate whether it will be worth moving. It can be a risk as well as if you are moving to a mortgage with a variable rate, that could go up at any time. Although lenders tend to remain competitive, they can change the rates to whatever they like so they may go up but it can be a risk worth taking as otherwise you could be stuck with a high rate for a long time. However, do check if there is a charge for leaving your current lender as it could be really expensive and not worthwhile.

So, there are different reasons for remortgaging and yours may not fit into one the above categories even. Whatever the reason, think about whether it is a sensible idea and whether it will work for you. Consider the costs and savings and look carefully at what you can afford to make sure that you are making the right decision for you and your budget. It is sensible to try to spend less, but if you need to borrow then make sure you choose the cheapest option.