Managing your credit score effectively and understanding how to keep your score healthy is essential if you are looking to borrow money (e.g. get a mortgage), get a new credit card, or even get a mobile phone contract. Having a poor credit score can be a real worry and have a big impact on your life. At Aqua, we know there’s much more to you than your credit score. No matter what your situation we’re here to help you on your journey towards better credit.
In this guide, we’ll show you what counts as a healthy score and how you can keep yours.
Before delving deeper into some of the ways you can keep your credit score healthy, let’s cover off some of the basics.
So now that you know what a good credit score looks like, let’s look at some of the ways you can maintain and improve a healthy score.
While it might seem like an obvious one, paying all your bills on time is a useful way of showing lenders that you can manage your money well. This will help keep your score on track and help other lenders to know that you’re in control and will pay back any money you borrow. With that in mind...
An easy way to make sure all your bills go out of your account on time is to set up direct debit payments so that your bills are being paid consistently every month. Setting up direct debits for your bills will mean you don’t have to worry about remembering to sort out payments each month and reduce the chances of missing a payment, which can affect your credit score.
It can be more difficult to gain access to credit if you have existing debt so it’s important to always keep assessing what you have and keep to your payments. One idea is to have everything written down into a plan, so you know exactly how much you have left to pay and when each payment is coming out of your account.
It may sound simple but keeping an eye on your credit report is one of the best ways to make sure your score stays healthy. Something simple like an incorrect detail can have an impact on your overall credit score, so checking the details on your credit file now and again for mistakes is essential. If you spot something that doesn’t look right, report it immediately and get it fixed.
Checking your credit report regularly is also a great way to guard against fraud and identity theft. If you see credit enquiries or information about accounts that you haven’t tried to open, get in touch with the bank or lender and let them know and report it to ActionFraud – the UK’s national fraud and cybercrime reporting centre.
Using a credit card regularly and making all your payments on time is a great way to maintain and build credit, providing you can pay it off on time and in full each month. Having a credit card and regularly paying it off essentially proves you’re creditworthy and can help increase your credit score over time.
Read our article on how to improve your credit score for more credit building tips.
Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.
Learn how credit card payments work, how and why credit card charges are applied and how to manage payments.
APR or 'Annual Percentage Rate' might seem complicated, but it's important to understand how it works.