What is ClearScore and how can it help my credit?
ClearScore was founded in July 2015, and was the UK’s first provider of free credit scores allowing users to view a snapshot of their finances and reports, they also offer consumer advice and protection services. The company earns revenue from financial institutions who pay ClearScore when new customers join them from the service, like a referral system. It fundamentally aims to empower people on all ends of the financial spectrum and give them more freedom over their personal finances.
Having a higher credit score can show potential lenders that you are trustworthy in your repayments and give you a higher chance of being accepted or approved for loans, credit cards, and mortgages at the best interest rates possible. Credit scores can range anywhere between 300 and 850.
Tip 1: Use eligibility checkers where possible
Websites that require a full credit check when taking out a line of credit usually have a soft check before completing an application in full. This is called an eligibility checker and after inputting some personal and financial information, will give a better idea if you will be accepted or not. This is a useful tool to use before taking out a full credit check that you may not be accepted for and that would have a negative effect on your overall score.
Tip 2: Use only around 30% of your credit limit
Credit utilisation is a tip to follow that will allow you to keep your credit score above and below a certain threshold, so you can become a responsible borrower. The reason it’s good to not over use your credit limit is that lenders will be more inclined to give you extra credit in the future if you’ve shown that your credit handling is responsible and sensible.
Tip 3: Multiple credit checks can have a damaging effect on your credit score
Hard searches are carried out when a creditor lender goes through the final checks of a credit agreement. Its good practice to avoid multiple checks in a short timeframe as hard searches can have a negative effect on your credit file. Where available, use eligibility checkers to make sure that you are more than likely going to be accepted before a hard search is made.
Tip 4: Make sure to pay your bills early or on time
Paying your bills early or on time in alignment with your credit agreement or direct debit date can have a positive effect on your credit file. One of ClearScore’s determining factors is payment times and it’s one of the main ways you can increase your score. Paying your bills late or missing payment dates completely can not only have a negative effect on your score but can lead to your account being put in arrears, defaulting or if no payments are made for a long time, or a CCJ.
Tip 5: Clean up mistakes on your credit file
Everyone can make mistakes from time to time but by checking your credit report regularly you can identify any mistakes and rectify them quickly. An example would be when an account still appears as open when you have recently closed it, you can call your provider to make sure it closed then you can keep checking your credit file so see that its updated.
If you’re struggling with debt and need personalised advice, consider visiting our Debt Solutions page for information on Individual Voluntary Arrangements (IVAs), Debt Relief Orders (DROs), Debt Management Plans (DMPs) and more. Or alternatively, get in touch with us today to speak with an expert debt advisor.
