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How to improve your credit score before applying for a loan

Lenders will analyse your credit score to assess your loan application. Learn what can affect your credit score and explore our tips to improve it to stand a better chance of being accepted for a loan.

Once you know how to check your credit score, it can become easier to identify ways to boost it. Discover the best ways to boost your credit score to help with future loan and other finance applications.

Your credit score helps lenders decide your creditworthiness when you apply for loans or other types of finance like a mortgage. A higher score means you are seen as more likely to make repayments, while a low credit score may be seen as a red flag by many lenders. So, actively taking steps to improve your credit score may increase your chances of having a loan application accepted. Let’s look at some of the best ways to boost credit scores and why it’s crucial to do so.

What you’ll learn:

What is a credit score?

A credit score is a number which determines the likelihood that you will repay any owed debts through a loan, mortgage or other financing options. In other words, a higher credit score makes you a more trustworthy option to lenders, as they see your score as a show of creditworthiness – a signal that you will make loan repayments on time and in full.

Not everyone will have a credit score. There are a few reasons why you might be considered “credit invisible” and have no tangible information to generate a score. If you are under 18 years old, you won’t have a credit score. Similarly, if you have recently moved to the UK, it will take some time for your UK credit report to be generated.

Your individual credit score will look different depending on which of the three credit referencing agencies you are looking at. Credit scores are fluid and typically update within a 30-day period.

Why do you need a good credit score?

When applying for a loan, your credit score will be used as one of the deciding factors on the success of your application or the favourability of the loan’s interest rates. A better credit score shows to lenders that you are financially trustworthy. Therefore, it’s likely you are seen as a responsible borrower who will make punctual repayments in full. Having a good credit score may:

A poor credit score may result from financial issues in your credit report history, such as multiple rejected loan applications, having a CCJ or defaulting on a loan. The potential consequences of a poor credit score are:

Note that your credit score may show as being ‘fair’ if you haven’t had a loan, credit card or other financial borrowing – this is because the credit reference agencies (CRAs) have no credit history to accurately calculate your score.

How to check your credit score

There are three major credit reference agencies (CRAs) in the UK – Experian, Equifax, and TransUnion. Each CRA calculates and regularly updates your credit score and credit report based on your financial history and current activity. You can check your credit score for free from any of the three CRAs, but check the details used to register are accurate to ensure you are provided accurate information.

Once you have signed up, you will be able to see your credit score. Your score will fluctuate over time, so taking steps to improve your credit score should help you with future loan and financing applications. Many lenders will check your credit score before deciding on your application. Your credit score may also change depending on whether a ‘hard’ or ‘soft’ check of your financial history has been carried out.

How to improve your credit score fast

Credit scores do not drastically change overnight – but it’ll pay to take the right steps to make a positive impact. Credit scores typically update every month, but significant issues such as CCJs, defaults or bankruptcy will be evident on your credit report for at least six years.

Let’s first look at a few of the quickest and best ways to boost your credit score:

There are some longer-term tips to help boost your credit score over time, such as:

How Norton Finance can help

A poor credit score doesn’t necessarily mean there are no loan options available for you. Our experts at Norton Finance work closely with you to find the best loan options to suit your financial circumstances. By searching the market for you, we can help guide you in the direction of flexible and affordable solutions.

We’ll start with a few important and quick questions to establish appropriate loans and loan types for you. We’ll also carry out a soft credit search, so your credit score won’t be affected. Get started with Norton Finance today by calling or getting an online quote.

Looking to learn more about credit scores or loan types? Our handy Know How blogs have it covered.


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