00:00if you want to improve your credit score then this is the video for you i'm going to talk about
00:05eight ways that you can try to improve your score and how this can help you get the best deals for
00:10credit cards mortgages and personal loans if you're new to this channel i'm matt i'm a finance
00:16consultant i've spent over eight years working for one of the top consulting companies in london
00:21i now run my own company and on this channel i talk all things personal finance so let's get
00:27going firstly what is a credit score a credit score is a sign of how healthy your credit report is
00:33and lenders will use it to check whether you're a reliable borrower it can impact whether you get
00:38accepted for loans mortgages and credit cards most of the top credit reference agencies equifax
00:45experian and transunion have four or five categories for credit scores ranging from excellent to poor
00:51each credit reference agency uses a different numerical scale to determine your credit score
00:56however you'll probably fall into one category with all of the agencies since they all base your
01:02score on your financial history experience scores range from 0 to 999 with categories very poor and
01:09poor below a score of 720 a credit score between 721 and 880 is considered fair a score of 881 to 960
01:20is considered good is considered excellent equifax scores range from 0 to 1000 a score below 438 is poor
01:32a score between 439 and 530 is fair a score between 531 and 670 is good between 671 and 810 is very good
01:45and a credit score above 811 is excellent and finally transunion scores range from 0 to 710 with very poor
01:53and poor below a score of 565 a credit score of 566 to 603 is fair 604 to 627 is good and 628 to 710 is
02:07excellent so why is your credit score important your credit score plays a role in determining the interest
02:13rate and payment terms on mortgages and loans and lenders will base the interest rate they charge on
02:19how risky they view as a borrower so while it may be possible to get a mortgage with bad debt you're
02:25typically better off improving your score before you apply for a mortgage to qualify for good terms
02:30this could save you thousands of pounds over the lifetime of the loan you may be thinking well i know
02:36what my credit score is but how can i improve it i've got eight ways to try to help you to do this
02:41firstly try to make sure that you always pay your bills on time as it shows on your records and
02:46demonstrates that you're able to make payments when you're supposed to lenders will use this
02:51information to assess your reliability to make payments to them on loans missing payments having
02:57account sent to collections or filing bankruptcy could hurt your scores and having a late payment
03:03history can stay on your records for a number of years i know paying bills on time can be hard
03:08particularly with the recent high inflation and increases to living expenses a couple of tips
03:14for you one is to set up direct debits for a few days after payday so you have the money in your bank
03:20account for when the direct debits are being taken out for your regular monthly bills and if you do have
03:25any late payments speak to your lender or provider and agree the plan to settle the payments over a
03:30fixed time period so it doesn't show as late on your records anymore the second way to improve your
03:36credit score is to review your credit utilization this is the percentage of your overall available
03:42credit limit that you're using and the typical guidance is to keep this at or below 20 to 30
03:48so if your credit limit is 2 000 pounds per month that would mean spending no more than 400 to 600 pounds
03:55each month on credit to calculate this for your own personal circumstances take your total available
04:01credit per month and divide it by the amount you spend on credit each month if you're unable to
04:06reduce the amount of spend you make on credit then one way to improve your utilization score is to ask
04:12for a higher credit limit from your credit provider importantly you don't have to use it but it can help
04:17to reduce your percentage credit utilization third is the length of credit history that you have this
04:22includes the average age of all your credit accounts and the age of your oldest and newest accounts
04:28showing a good history over a long period of time with a bank shows stability that doesn't mean you
04:34can't look for the best bank account to move to but think about keeping a long-term account and then
04:39having another account which you switch to the best interest rate every so often that way you don't
04:44lose the stability of having an account over the long term the fourth point is to check your credit
04:49report for inconsistencies you can view your credit report with experian equifax and transunion ensure the
04:55history is accurate and consistent and shows things like the correct property addresses for the correct
05:00periods of your life and review the information and look for any mistakes or errors this is important
05:05because lenders will use this information to cross check to any application that you make for credit
05:10and if there are discrepancies in the information this can result in your application being declined
05:16reviewing your credit report can also in the worst case identify fraud if someone's taken out credit in
05:22your name without you knowing about it i had this a few years ago where a credit card had been taken
05:27out in my name by someone else and i work with the credit report agencies to correct this information
05:33and remove the incorrect credit card from my records the other thing to watch out for is linked accounts
05:38so if you've ever taken out anything with another person such as a joint account and you no longer need
05:43that account then it's important to correct this information and give a notice of disassociation
05:49as if the person you had a joint account with had a bad credit score this could also impact your credit
05:54score as well the fifth point is the credit mix that you have and to use a credit card responsibly
06:00this considers whether you're managing both installment accounts such as car loans personal loans or
06:05mortgages and also revolving accounts such as credit cards showing that you can manage both types
06:11of accounts responsibly generally helps your credit score there are lots of benefits of using credit cards
06:17such as protection on your purchases and cashback but make sure you can pay it off each month and only
06:22spend within your means for example on day-to-day food shopping and transport this will help to build
06:28up your credit score the sixth point is to avoid too many hard searches and to space out applications
06:34where possible hard searches are performed when you apply for credit and the company that you've applied
06:39to will check your credit report for example it could be an application for a mortgage a credit card
06:44or even a mobile phone if you have too many hard searches it can impact your credit score
06:50experium recommends no more than one or two hard searches every few months so try to plan out any
06:56applications you intend to make so you can spread them out over a longer period of time and not have
07:01them all in one go the seventh point is to register to vote it's very simple to do as long as you're
07:07eligible to vote in the uk and the reason why lenders look at this is that it confirms who you say you are
07:13and that you live at the address that you say that you do often if you're applying for a mortgage this
07:18will be one of the criteria flagged if you've not registered to vote so if you've not done it already
07:24then i recommend doing it now and finally number eight try experium boost to see if it can help to
07:29improve your credit score experium boost takes into account regular payments like your monthly utility
07:35bills your mobile phone contract or tv subscriptions like netflix and it can help to show that you're able to
07:42manage your money not all lenders will take it into account but it's an extra step which could get you
07:47those additional points that move you into the best credit score band possible the key is to be aware of
07:53your credit score and the things that you can do to improve it particularly before taking out a loan
07:57or line of credit so you can get the best deal possible i hope this video has been helpful feel free
08:03to leave any questions in the comments and give the video a like and a subscribe and i'll see you next time
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