Those five little words – ‘How to boost credit score’ – can make such a huge difference to our lives.

A poor credit report doesn’t just potentially affect your chances of getting a mortgage, a loan or credit card these days. It can also impact your mobile phone contract, car insurance, bank accounts, and it will invariably lead to you being offered higher interest rates. The consequences are wide-ranging and the strain they place upon our financial circumstances can be demoralising as well as damaging. What we need to remember though is a poor credit score can happen to anyone, at any stage of their life. And no matter how frustrating it may be, there are ways of improving it.

Here’s all you need to know about how to boost credit score ratings, and what PCCU can do to help.

Tips on how to boost credit score

• Reduce your credit utilisation. Your credit utilisation ratio is a measure of how much available credit you are using. For example, if you have a credit card limit of £10,000 and the balance is £6,000, that is a rate of 60%. You should aim to keep this below 30% through not overspending and ensuring credit card balances are paid off.
• Keep old accounts open. Closing down old credit cards while you have a balance on other ones could increase your credit utilisation ratio.
• Limit requests for new credit. When applying for a credit card, loan or mortgage, a lender will complete a comprehensive review of your credit history in order to determine how much of a risk you pose. This is called a hard inquiry. A single hard search is unlikely to have an adverse affect on your credit score. However, a number of them in a short period of time can be problematic.
• Review your credit file, for free by clicking here, to check for errors. When doing this make sure to check using soft inquiries as this will not affect your credit score.
• Have any inaccurate things removed. Filling a dispute – for example, over a late payment – can have a big impact on your credit score. Whether it goes up or down though will depend on the outcome of the dispute. Late payments will generally stay on your report for seven years.
• Deal with your delinquencies. Being late by more than one month is considered delinquent. A lender may not report a delinquent account to a credit agency until two or more payments are missed, so if you do miss one try your best to come up with an arrangement as soon as possible.
• Prove where you live. Registering to vote will help confirm to lenders your name and address, which in turn should increase your credit score. Also, bear in mind that moving home regularly can give lenders the impression you are struggling with paying rent.
• Make repayments on time. Payment history is one of the biggest determining factors in calculating a person’s credit score. Avoiding late payments is therefore crucial if we’re to keep our score high and healthy. This can be easier said than done, which is why, if you are struggling, you should contact PCCU.

Can I still get a loan with bad credit?

Getting a loan with bad credit is possible, but it’s often a lot more challenging and far more expensive.

As a not-for-profit organisation, PCCU operates a much fairer model when compared to other lenders; starting with the fact we don’t judge a person solely by their credit score. Although we do check credit history, each application is assessed individually by a person – not a computer – who looks at affordability, income and expenditure. We only lend amounts we are confident you can afford to pay back, and we also don’t charge differing rates of interest on loans based on your credit score.

PCCU is committed to offering products and services that help account holders manage their finances while building up a history of good money management. All loans taken are reported to the credit agency Experian, which means as long as an account holder makes their payments on time their credit rating will improve.