Our credit score is something that lenders, letting agents and even some employers will look at in order to make decisions about us. If they judge that we do not have a good credit record then this may mean that we will not be able to borrow money or get leant money at high rates. We may also get turned down for certain private rental houses and may not even be able to secure a job. This means that having a good credit score can be really important. There are things that we can do to try to improve our credit score if we feel that it will help us. Some people suggest that getting a credit card can do this and so it is worth considering whether this would work for you.
How does credit
In the UK there are three companies that you can contact in order to look at your credit report. This holds information about your financial history and will allow anyone who looks at it to see whether they feel they would be prepared to lend to you or whatever. If they see that you have had unpaid debts in the past or you have them now, they may be reluctant as they may feel that you will might be likely to do the same again and not make payments or repayments. So it is all based on risk and so if you show that you are not a good risk because you have missed debt repayments, have lots of debt or have a CCJ for unpaid debt then you will not get a good score. However, if you make regular payments and do not have any unpaid debt then your credit score will be higher. Scores are not always calculated the same way; it can depend on who is looking at your record but the things that you can do to improve your score are pretty much the same.
How can it be
The first place to start is to have a look at your credit record. You can do this for free through several different companies. You then should check to make sure that the information on it is correct. If it is not then get in touch with the companies that claim you owe them money to ask then to put it right.
If the information is correct then you will be able to see whether there are any things on there which look like they could do with improving. It could be that you have a large debt which you could do with paying off or that you owed money in the past that you have now paid off. If it is a debt that is a problem then you can get working on repaying it. However, if it is something from the past then things have been resolved now and you may just have to wait until enough time has passed for it to be removed from your credit record. However, it might be that you have never had credit or do not have your name on enough bills to actually have much of a credit record. If you are not signed up to direct debits, a rental agreement and have no credit card or anything like that then there is not much for anyone to go by. This is where people might look to borrowing to improve their credit score.
How can a credit card
There are some credit cards which are specifically targeted to those who wish to improve their credit score. They are happy to let those how do not have such a good credit record have one. These could be worth considering but also see if you can get a regular credit card as these are likely to be cheaper. The important thing to do with a credit card though is to repay the full balance each month. With a credit card you are allowed to just repay the interest on the card; and possibly a bot more; or to repay any higher amount including everything that is owed. If you pay it all off then you will have no charges for your borrowing. The more you are able to pay off the less the cost of the borrowing will be. It is therefore best to pay it all off and if you want to improve your credit record then you will need to be able to do this. This means that you need to be careful when you have a card that you only spend on it if you can afford to repay it. It can be wise to use it to pay for groceries, fuel and things like that and then set up a direct debit to pay the card off when you get paid. Keep the money that you would normally pay on these things in your current account and it will be there ready to pay off the card when necessary.