6 ways to protect and improve your credit score responsibly

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If you’re looking to improve your credit score, you’re not alone – and there are plenty of ways to take action. 


Your credit score is a three-digit number that reflects both your creditworthiness and financial history. Lenders and credit card companies use credit scores to determine how likely you are to pay your debts back on time. The higher your credit score, the more likely you are to be approved for loans and credit cards with reasonable interest rates. 


Here are six effective ways to protect and improve your credit score safely and responsibly:


1. Pay your credit card bills on time


If you’re just starting out on your financial journey, it can be frustrating to see a lower credit score simply because of your lack of credit history.


One of the most important things you can do to build credit is pay bills on time and in full each month. This shows lenders that you are a reliable borrower and can be trusted to repay any loans or credit extended to you.


2. Keep your credit card utilisation low


Credit utilisation is the amount of credit you use compared to the amount you have available in your account. For example, if your limit is £5,000 and you use £2,500 of that, then your credit utilisation is 50%.

Unsurprisingly, this is an important factor in determining credit score. Lenders generally view a low utilisation ratio more favourably, which can have a positive impact on your credit score. 


Many financial experts say consumers should aim for a credit utilisation of between 0-30%, as this shows you can manage your money effectively.


3. Your credit report matters – check it for errors


Did you know that even small mistakes such as an incorrect phone number can affect your credit score? In fact, some lenders may even reject your application for credit based on these mistakes. So it’s important to review your credit report regularly to make sure it’s accurate. If you do notice an error, it’s best to contact the provider directly and ask them to make the necessary corrections.


By keeping your credit report up to date and accurate, you can help ensure you’re viewed as a trustworthy and reliable borrower by lenders.


4. Avoid moving house – and register to vote


When it comes to your credit score, stability is key. Lenders like to see a stable address history, so frequent changes in address can raise concerns in their eyes about your ability to manage finances.


While it’s not always possible to stay in one place, it’s important to keep in mind the potential impact on your credit score. Lenders may view frequent address changes as an indicator of difficulty paying rent, which can essentially lower your credit score. By staying at the same address, you can significantly improve your chances of being approved for credit.


Similarly, it’s also harder to be approved for credit if your details aren’t on the electoral roll. So be sure to sign up if you’ve just moved house, or have just realised you’re not on it. 


5. Keep old credit card accounts open


Another way to improve your credit score is to simply maintain your older credit accounts. It shows lenders that you can have a track record of responsibly managing multiple credit accounts over a long period of time.


You’re also rewarded by credit scoring models for having a lengthy and positive credit history. So, if you have any old accounts, it’s a good thing to keep them open to help build your credit score.


6. Perform an eligibility check with DivideBuy


Being rejected for credit can be discouraging, and it can also have a negative impact on your credit score. By using DivideBuy’s eligibility checker, we can see if your credit application is likely to be successful before you apply. 


When you shop with our selected retail partners and enter your details at the basket page, our technology performs a soft credit check. From this, you’ll instantly know your eligibility for the specific amount you want to borrow. And by using our tool, you’ll reduce the risk of being refused and protect your credit score in the process.


Want to find out more about how to spread the cost and use our eligibility checker, but have never used DivideBuy before? You can find out how it works here.


You can also browse more DivideBuy retailers by visiting our shopping directory.


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