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5 Tips to Improve Your Credit Score

Our credit history and our credit scores are fluid, they can change over time.

Every six (6) years any accounts that are old on our credit files for the six years should drop off, and our credit scores can change all the time depending on a few factors.

The factors that can affect our credit scores are:

* Payment history

* Balances

* Types of accounts we have

* If we apply for new credit

* How long we have had credit

Obviously the factors that has the most influence over our credit score is payment history. If you make late payments, or default on a loan, it has a huge negative effect on your credit score.

So one no brainer way to get and keep a good credit score is to pay on time.

Credit scores are important, and not just for receiving credit, they are used in other aspects of our lives, such as for jobs and getting insurance.

So we need to not just be aware of our credit scores, but acknowledge how important they are to our lives.

Here are 5 tips to help you improve your credit score.

Check Your Credit Report

It is important to check your credit file regularly, at least once a year. And you can do this for free.

There are three credit bureaus here in the UK:

* Experian

* Equifax

* Call Credit now Transunion

The reason why you want to check your credit report is the obvious reasons, for errors or omissions.

These errors or accounts you may be paying that are not listed, can be costly to your credit score. So you want any errors corrected, either by the creditor themselves, or through the credit bureaus.

Any accounts that you are paying and are not listed on your credit report, you would contact that creditors directly and inquire as to why the account is not reported.

Not all lenders report to all three credit bureaus.

Pay On Time

As we mentioned before, payment history is a biggie when it comes to improving your credit score. Payment history is 35% of your credit score, so it is easy to see how a few late payments could cause your credit score to nosedive downward.

The Electoral Role

If you are not already, register to vote and get on the Electoral Role.

Being on this list helps prove you live where you state you live, and aids lenders in proving your identity.

It also reduces the risk of fraudulent credit applications in your name and identity theft.

Balances on Your Accounts: Your Total Indebtedness

Having high balances on credit cards and loans decreases or lowers your credit score.

Oddly enough, having £10 of debt between 3 accounts, hurts your credit score than having £10 in debt between 5 accounts.

As long as the accounts are not near their credit limit, this can help improve your credit score.

Paying off accounts, especially credit cards, or transferring balances to other cards you already have to reduce the balances from being near their credit limits, can help increase your credit score.

But as we will see, not taking out new accounts to transfer balances is also important.

Do Not Apply For a Lot of New Credit

Each time you apply for credit, the lender will look at and review your credit history. These inquiries are called “footprints” as they leave a trace of who has viewed your credit file.

Too many inquiries or footprints, reduces your credit score.

So limiting the number of inquiries by not applying for new credit, can help in improving your credit score.

As we can see, credit scores are an important part of our lives, and one we can change and improve with time, and these few tips.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
 
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”https://www.paydaybadcredit.co.uk/direct-lender/” data-mce-href=”https://www.paydaybadcredit.co.uk/direct-lender/”>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html” data-mce-href=”https://www.handbook.fca.org.uk/handbook/CONC/4/2.html”>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”https://www.gov.uk/county-court-judgments-ccj-for-debt” data-mce-href=”https://www.gov.uk/county-court-judgments-ccj-for-debt”>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.