Improving Your Credit Score in 2023

Improving Your Credit Score in 2023

For many people, getting their finances in order isn’t an easy task. In fact, everyone will be in debt at some point in their lives, whether it is large or small. Perhaps you’re somebody who has difficulty sticking to a budget or simply has too many outgoing bills to manage effectively. Don’t worry! The process of understanding your finances and sorting them in an effective way takes time. Following the rise in inflation and increased energy bills that hit us in 2022, many of us are still learning how to adapt our finances to the changes. With poorly managed finances, it can be difficult to stay away from debt. Previously, many people would automatically turn to payday loans for assistance, however, with price increases, these may not be the best option. Fortunately, there are ways to keep costs low, one of which includes improving your credit score.

Often without realising it, your credit score plays an important role in your daily life. It is often used to help lenders gather a better understanding of whether you’re considered a risk to lend to. Once this decision is made, a lender will either accept or decline your application. Depending on your credit score, a lender will increase or decrease the interest rates if accepted. Therefore, it is likely that if you have a higher credit score, your overall interest rates could be significantly lower, making the loan cheaper for you. So, here are a few ways you could increase your credit score in 2023.

Correct Any Errors And Mistakes On Your Credit Report

The information on your credit report could be the deciding factor as to whether a lender will lend to you. Therefore, having errors and mistakes in your report could massively impact your overall costs or acceptance rates. However, checking your credit report shouldn’t be done very often; it is recommended that individuals do so once or twice a year. Many companies, like Experian, will offer two free reports, so for those wanting more, there will most likely be a fee involved. Some of the most common credit report errors you should look out for include repeated listings of the same debts, incorrect balances, accounts mistakenly shown as late, and wrong personal information.

Paying Bills On Time

The simplest, yet best, option to demonstrate to lenders that you can efficiently manage your finances is to make sure your expenses are paid on time. Paying your bills and debts on time will slowly but surely help to improve your credit score. This is because you are proving that your financial skills and priorities are in place. Therefore, suggesting that you are a trustworthy applicant to a lender. However, on the other hand, if your financial management isn’t prioritised issues like missed payments will arise. Unfortunately, these will stay on your report for six years, available for lenders or credit checkers to see.

Build Your Credit History

Building your credit history is a crucial element when trying to seek financial help or guidance. In summary, your credit history is a record of how you use credit. This could include aspects like your previous loan applications, your repayment consistency, and other important aspects a lender would like to consider before accepting your application. Companies will find it challenging to evaluate you as a borrower if you have limited or no credit history. Building your credit history can be increasingly challenging as you have to get credit to build credit.