Use Our Tips To Get a Perfect Credit Score

We all want to have a perfect credit score, but how many of us really know how to achieve it? There are several steps that need to be taken in order to achieve it. In most instances there is no instant fix that can catapult people from having a poor credit score to having a perfect credit score. However, there are steps that we can all take to at least improve it by a few points. Those additional points could make the difference between being approved for a loan, credit card, mortgage, or having your application declined.

Here are a few simple steps to follow in order to improve your personal credit rating:

STEP 1 – What Is Your Current Credit Score?

It’s impossible to improve your credit score without first knowing what that score is. There are 3 different credit reference agencies in the UK (Experian, Equifax & Callcredit). Each of these has different credit scoring mechanisms and attributes different values to those scores.

The credit scoring ranges for each credit reference agencies are provided below, along with links for you to be able to check your credit score.

Experian credit scores range from 0 - 999
Equifax credit scores range from 0 - 900
Callcredit credit scores range from 0 - 1500

STEP 2 – Why Is Your Credit Rating Set At This Value?

There are a number of different elements that can contribute to your credit score. Look into each of the elements listed below and take any action that is required.

Number of Accounts & Level of Exposure:
How many credit accounts do you have? What is the value of these?
Is this level of exposure within your means?

Having multiple credit accounts can be a good thing, so long as you making each of your payments on time every month. This demonstrates that you are capable of managing your finances well.

On the flip side, having a number of accounts could also be your downfall. Creditors will want to see that you are not overexposed. You should stay well within your credit limits. Some lenders now share white credit data on you. This includes information such as your credit limit and your current level of exposure.

If you are making credit applications and are already near your credit limits, lenders may question your ability to manage your finances effectively and believe that you are just opening new accounts to pay off old debt. Don’t do this, as it will only cause you problems in the long run.

Credit Applications:
How many credit applications appear on your credit report?
What length of time has passed between each application?
Are you responsible for each of those credit applications?

Ideally you should shop around for credit before making applications. Check with creditors to see if they can do a quotation search before carrying out a full credit search on you. Carrying out a quotation search does not leave a footprint on your credit report, whereas a credit search does. Numerous searches /applications leave footprints on your credit report. This is not looked at favourably by lenders and can lower your credit score.

If you do need to make credit applications, do so ONLY as and when they are needed. Allow a good amount of time between each application. A large number of applications for credit within a short period of time could indicate desperation on your part, or even flag up a signal that you may be a victim of identity fraud.

If you don’t recognise credit applications that have been made in your name, then you need to act upon this immediately. You may be a victim of identity fraud.
Payment History:
Have you always paid your credit accounts off on time? If so, is this reflected on your credit report?

If you have missed payments in the past, now is the time to get on top of things and start paying off your accounts. Remember that every payment you miss is marked on your credit file. The greater the number of missed payments you have, the lower your credit score will be.

If you have made your payments on time, but they are not reflected on your credit report, you should take things up with your creditor. They can correct any information that has been inaccurately filed on you.

Demonstrating that you make payments on time is the key driver to improving your credit rating and achieving a perfect credit score. If we could give just one piece of advice to help you get a perfect credit rating, it would be to make your payments on time.

Address Stability:
Is your correct address listed with each of your creditors?
Are there different variations of the same address appearing on your credit report?
Are there any incorrect addresses appearing?
How long have you been at your current address?
Are you on the electoral roll?
Are you a home owner?

Creditors like to see stability with their customers. If you stay at the same address, they know that they are going to be able to find you easily enough if they need to. From a creditor’s perspective, the longer that you have remained at an address, the lower your level of credit risk.

Ensure that each of your creditors have your correct address on file. Showing multiple addresses indicates a higher level of credit risk.

Make sure that a consistent address format is used for each of your addresses. An example of different address formats is shown below:

Flat 1 A – 17 Blackriars Road, London, SE1 2 AT
17 Blackriars Road, Flat 1 A, London, SE1 2 AT

Although these addresses are actually the same in the real world, they appear differently to automated database searches. As you now know, the greater the number of addresses appearing on your credit file, the higher your level of risk is perceived to be, thus lowering your credit score. Correcting these address formats will enable automated searches to show your correct number of addresses and help you to bump up your credit score.

Find out how Royal Mail lists your address as this is the format that will be used with your electoral roll information and with most banks. Use the Royal Mail address template with all of your creditors.

The electoral roll provides an additional level of information to confirm that you reside where you say you do. If you are not already registered to vote, you should do so now. Being on the electoral roll puts you one step closer to achieving a perfect credit rating.

Being a home owner can further boost your credit score. Home ownership provides creditors with another data source that they can check in order to verify your location. This data source is the land registry information. Those who own properties move less often than people who rent. If home owners do move, it is likely that they will purchase another property and will continue to be found via land registry data.

Owning a property may mean that there is equity which creditors could secure lending against if they needed to do so.

STEP 3 – Take Action

Take time to check through your credit report and take action where it is required. It will take time to build your credit rating - there is no quick fix to achieving a perfect credit score.

Remember, even if you achieve a perfect credit score from a credit reference agencies perspective, it doesn’t necessarily mean that you will achieve a perfect credit score with a lender.

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Additional UK credit report services: Use the links below to place your order with Experian & Equifax:

Experian UK Free Credit Report and CreditExpert Credit Monitoring From Experian. Order Experian Credit Expert!

Equifax UK Avoid nasty surprises with any credit applications. Signup with Equifax and use the Free Report & Monitoring: Order Free Credit Report!

The Credit Agency UK LEARN more about Credit Reports, the way lenders use them and how to Improve Your Personal Credit Score: Personal Credit File Information!