Why should you keep track of your credit score?

You always hear about the importance of having a high credit score. And for good reason. Your credit score helps lenders analyse whether they can take the risk of providing you with finance. The credit score will be a number between 300 and 850 (the higher the better) that credit providers will then investigate. Below, we explore why a high score is important and how you can boost yours.

The benefits of a good score

Generally, a high score will mean that lenders trust you. And this can have a positive knock-on effect in plenty of ways. It’ll be easier to secure that crucial mortgage given that the lender will have more trust you. And even if you’re looking to rent it’ll be helpful. Aside from properties though, a high score has other benefits. Credit cards will be simpler to secure, and you’ll have a lower interest rate on them. And on an everyday level, you’ll get yourself better car insurance rates and will be more likely to get accepted for a phone contract.  

The main things to focus on to boost your score

Don’t close old credit cards

Once closed, a credit card will impact your score much less. If you have a solid history on a credit card, keep it open to show creditors you’re trustworthy.

Treat debts equally

Pay all your bills on time. Even small, less important bills can impact your score if not paid punctually.

Avoid increasing the balance on credit cards

When you’re in a stressful financial situation it can be easy to keep piling up the balance on your credit card to pay bills. But this will chip away at your score.

Lower your debt

The lower your debt, the higher the score. Manage your debt to ensure it never creeps too high.

What to do if your score is low and difficult to boost

Using a pre-paid card can help you escape the credit cycle and begin to build your score. Some financial technology businesses are helping to provide this opportunity to those excluded by the credit score system.

Matthew Sanders, CEO of Suits Me, commented: “We decided to create an alternative banking solution for thousands of people in the UK, from those who are financially excluded from the mainstream by poor credit, to those coming to work in the UK who do not satisfy High Street Banks Customer criteria and those who simply want a modern straightforward and honest solution.”

Boosting and maintaining your credit score can feel daunting. But by tending to your score – or by taking out a pre-paid card – you can begin to improve your credit rating.