Having a bad credit score can have a dramatic impact on your chances of getting a loan, credit card or even a mortgage.
Having a good credit score on the other hand can make getting a loan or a credit card easy. So how can you build up your score from scratch and ensure that you’ll have access to credit whenever you need it?
1. Get a credit card
In order to have a credit score, you need to use credit and the easiest way to do this is to apply for a credit card or store card.
Talk to your bank and see what they can offer you. Once you’ve got your card, remember to use it as this is the only way you’ll start to build up a score.
2. Pay your bills on time
Whether it’s your credit card or your gas bill, make sure that every invoice or payment request that comes through your door gets paid straightaway.
This will show the people in the know that you pay your debts and that you’re responsible enough to lend money to.
3. Be patient
Building up a good credit score can take time, so don’t expect yours to skyrocket overnight.
It could take six months of effort on your part to see a difference in your score, so just stick to your plan and be patient.
4. Apply for more credit
Once you’ve built up a basic credit score, it’s time to apply for more credit.
It’s important to wait a little while before applying as too many credit applications can set off alarm bells, so take your time and build it up slowly.
5. Get informed
Once you’ve got credit and are using it, it’s important to get informed about what can damage and what can benefit your credit score.
That way you’ll be able to protect your score and make good use of all of the hard work that you’ve put in, standing you in great stead for the future.
If you have no credit score but are in need of cash to pay bills or for another purpose, specialist lenders can offer loans for people with no credit. If you can keep to an agreed repayment plan these can be useful options.