Simple Ways to Build Your Credit Score

What is a Credit Score and Why Does it Matter?

Your credit score gives lenders a better understanding of how you manage your finances. This numerical ranking is then used by lenders to assess the risk of lending to you and help determine the terms of your loan.

A strong credit score can often increase your borrowing power and help you access better loans, credit cards and mortgages with lower interest rates.

But how do we go about improving it? Here are Thistle Credit Union’s top tips for improving your credit score rating.

Make Loan Repayments on Time

Making loan repayments on time and in full each month is one of the most effective ways to demonstrate to lenders that you are a reliable borrower and that you can manage credit responsibly, helping to increase your future borrowing power. Setting up reminders and automatic direct debits can help to ensure deadlines are not missed and payments and made in full.

Focus on Paying Off Any Outstanding Debts

Your credit score could improve within as little as two months after paying off outstanding debts. Although it may dip initially, your credit score will soon recover after proving to lenders that you have successful repaid your loan. It’s important to make scheduled repayments on time as your payment history is also an important factor when determining your credit score.

At Thistle Credit Union, our debt consolidation loans are specifically designed for those who are repaying a significant amount of debt by collating your debt into one regular monthly repayment. Click here for more information about how a debt consolidation loan can help you.

Maintain Stable Employment

Maintaining consistent employment indirectly improves your credit score by demonstrating that you’re financially stable to lenders. This helps to reduce their risk and help you qualify for better credit terms when borrowing.

Get Yourself on The Property Ladder

Owning your own home is a great step towards long term financial security and although taking out a mortgage will initially lower your credit score, making regular repayments on time will strengthen your score in the long run.

Avoid Moving Regularly if Possible

Your information, including your address, is used by lenders to identify who you are and your financial behaviour. Long term addresses act as a positive indicator when assessing loans but also helps to reduce disrupted and out of date records.

Register Your Address on The Electoral Roll

The electoral roll is a list of UK citizens who are registered to vote in political elections. Registering your address on the electoral roll not only allows you to vote in local and national elections but it also helps lenders to confirm your name and address when applying for a loan. Your address is often one of the first things a lender checks and you can still register if you live in rented accommodation, shared housing or with your parents.

Keep Records Involving Your Address Up to Date

Keeping your personal information up to date is one of the easiest ways to improve your credit score. This not only helps lenders identify you but it can also help to identify and prevent fraud. You can check your credit report with a credit score agency such as Experian and Clear Score to make sure your information is up to date.

Consider Affordable Borrowing Options

Having little or no credit history makes it harder for companies to assess your finances and your financial behaviour, which could lead to a lower credit score. Building a credit history takes time, patience and careful management but taking out an affordable loan from Thistle Credit Union is a great place to start. Our loans are assessed by real people, built with your best interests at heart and we never offer a loan that could cause financial harm; meaning you can trust us to help you build your credit score. Click here for more information about how a Thistle Credit Union loan can help you.

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Why Choose Thistle Credit Union?

Thistle Credit Union was founded under the name Blantyre Credit Union in November 1991 and has been proudly providing affordable loans and ethical savings ever since. We’ve grown rapidly over the last 30 years and are not trusted by over 14,000 members across the West of Scotland.

Thistle Credit Union offers a genuine alternative to traditional banks through our ethical savings accounts, affordable low interest loans and not for profit approach. Contact our friendly team or follow us on our social media platforms for more information about how Thistle Credit Union can help you thrive.