A ‘bad’ credit rating will prevent you from getting a mortgage, loan, or credit card. You will most likely be charged a higher interest rate and have a reduced credit limit. So doing everything you can to improve your credit score is an excellent idea.
I will love to help. I’ll take you through all the steps you need to build up your credit score to get the best rates on everything from loans and mortgages to utilities.
I made this video a while back and covered what to do to build credit as a newbie to the UK.
The topics covered are summarised below.
Steps to building your credit
1. Get the right information from the correct source
People always want to help and show you how things work when you are new. Listen and take notes, by all means. Then check with official sources to ensure the information you were given is correct. I used to work in a UK bank as a financial adviser. You will not believe the stories I hear about how to build credit. The sad thing is these stories are widespread within communities. This false information hurts people’s finances and could put you on the path to financial ruin. Be smart, be different. Get your data from the right source.
The right sources are:
2. Be Patient
Your credit history will take some time to build. Exercise your patience muscles. Stay calm, and do not take shortcuts. There are no shortcuts to good credit. Expect to start seeing history from about 6-12 months.
3. Get registered on the electoral roll
Are you eligible? Check if you are eligible here.
4. Fill out bank applications correctly
Make it a habit to fill out forms correctly because mistakes can bring your credit score down. Watch out for the little things like names and addresses. Correctly fill in your name as shown in your passport for all bank applications. Your home and work addresses should be in full, including postcodes. Details matter.
5. Open and use your bank account correctly
- Get your employer to pay your wages into your account.
- Refrain from paying large stacks of unverifiable cash constantly.
- Pay your bills directly from your bank account with direct debits.
- Do not spend more money than you have in your account.
6. Take out small types of credit to build your history.
These could be your mobile phone contracts or store cards. Use these and pay back in full when due.
Take advantage of my free Fix Your Credit guide, which you can download, read and share.
Thanks for taking the time to read.
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