HOW TO... increase your credit score

Your personal rating is used by banks, lenders and other companies to assess how likely you are to be able to pay back any money you may wish to borrow. It can affect everything from car insurance and credit cards to mobile phone contracts and mortgages so it’s important to build up a good rating as early as possible. The higher your score, the better rates you’ll get, so there’s no time like the present to give yours a boost…

• Make sure you’re on the electoral register, as this is proof of your address and it’s always one of the first things checked by lenders. Students need to register too, even if they live at university during term time.

• Always pay bills on time. Anything from credit cards to water rates should be settled on time. Apart from keeping your finances in check and avoiding getting into debt, it keeps your credit score on the up. Setting up direct debits is a good way to ensure you don’t forget.

• Close any unused credit cards as this will lower the amount of credit available to you. A large limit can sometimes be viewed as a negative by some lenders, even if you’re not in debt.

• You can get credit builder cards, which are ideal for those who have only just turned 18 or have never had any debt or loans. These cards help to build up a credit history but they do have higher interest rates so make sure you pay the balance off each month.

• Look for mistakes on your credit report and correct them immediately by contacting the agency – Experian, Equifax and TransUnion.

• You should see your score start to improve but it does take time, so the sooner you take action the better.