So your credit score isn’t as good as you would like it to be, and you want some tips for easy ways to boost it? Look no further! Ozoomi’s team has gathered nine nifty tips that can help improve your credit score.

1. Keep an eye on your credit report

Keeping an eye on your financial well-being is key. Take a moment to check your credit report for any mistakes or suspicious activity. It is also very important to make sure the info you provide on your application matches what's in your credit report.

This easy step will help keep things accurate and smooth for you. Your financial health matters, so let's make sure everything lines up just right!‍

2. Build up your credit history

Having very little or no credit history can make it difficult for credit reference agencies (CRAs) to score you, which can end up with you getting a lower rating. 

There are options to explore, like credit cards, but it's crucial to go through the terms and conditions thoroughly. This makes sure that you're on solid ground financially. There are credit card companies specifically geared towards assisting people with less credit or a poorer credit score, making it easier to find the right fit for you.

-- Guess what? Ozoomi Boost offers a great, 0% interest approach to build up your credit score. It turns on-time manageable payments, determined by you, into savings.

1. Simple Start: Choose an affordable monthly sum, starting at £20.
2. Unlock Savings: Your yearly total is secured in a savings account upfront.
3. Credit Improvement: Online, monthly repayments, which can boost your credit, are reported to CRAs.
4. End-Year Reward: After 12 months of on-time and full payments, gain access to your savings alongside an improved credit score!

Discover more on our Ozoomi Boost page.

3. Avoid applying for too much new credit

Opening several new loans in a short period can temporarily lower your credit score due to the inquiries made by lenders and CRAs.

In addition, this might signal financial strain or a plan to take on more debt than manageable, affecting your credit rating. Be selective in applying for new credit, only choosing what you truly need and can handle responsibly. By doing this, you maintain a stable credit profile and avoid unnecessary dips to your score. 

‍4. Don't necessarily rush to close old credit accounts

It's a great idea to hang onto older credit accounts if you’ve had a good payment history, because these can actually help your credit score.

Why?

• They show you've been responsible with credit over a longer period, meaning you have a longer credit history.
• The open accounts give you a higher total credit limit, which is positive in the eyes of lenders and CRAs.
• Consistent, on-time payments on these accounts demonstrate how reliable you are with credit. 

So, keeping these older accounts open is smart because closing them could shorten your credit history, lower your total credit, and take away some of the good stuff they bring to your credit report.

‍5. Be aware of high-cost, short-term loans

It is particularly valuable to mention the dangers of short term loans that attract high APRs. These loans tend to be high-cost and can be a red flag for lenders and CRAs as it could indicate that you’re in financial distress and need ‘emergency’ funds.

6. Make timely payments on all bills

Ensuring you pay your bills on time is key because it can impact your credit report - late payments negatively impact your credit score and your credit file. This is a detail that can easily slip by, but staying aware and mindful of these due dates can truly help your credit score.

To make things more manageable, think about setting up direct debits or reminders to help you keep track of your payments and make sure that your payments are processed before the due date. 

7. Keep your credit use low and payments manageable

Keeping your credit utilisation low is important for maintaining a healthy financial profile. Your credit utilisation is essentially the proportion of your available credit limit that you're using.

• If you have a credit limit of £2,000 and you've used £1,000, your credit utilisation is 50%.
  

Typically, lenders view lower credit utilisation more favourably, seeing it as responsible credit management (which can boost your credit score!). To make it a bit simpler, it's advisable to aim for a credit utilisation below 25%. 

‍For example, as mentioned above, if you're using £1,000 of a £2,000 limit, your credit utilisation rate is at 50%.

• If you can lower that to using only £500, it would bring your utilisation rate down to 25%, potentially giving your credit score a positive boost.

If you are often near the credit limits on things such as credit cards and bank overdrafts, it signals to lenders and CRAs that you probably do not have enough disposable income to receive more credit, and could soon be starting to struggle with the financial commitments that you already have.

Even if you have no missed payments or adverse credit, if you have a high credit utilisation, you may not be considered for finance, or be offered a higher rate of interest to reflect the higher perceived credit risk. 

8. Make sure that you are registered to vote!

This improves your chances of approval, and is a very easy step everyone can take. 

You can choose to remove yourself from the open register if you have privacy concerns. This also is effective if you do not want to be targeted by cold callers selling products or services.

9. Ensure defaults and insolvencies are shown as satisfied 

Make sure that any defaults or insolvencies are marked as "satisfied" on your credit report once they've been settled, and removed after the necessary time has passed. Don't forget to double-check this with all three credit reference agencies!

By doing this, you're taking control of your credit report, showing that you've sorted out past issues and you are ensuring your report reflects your current financial situation accurately. It's a positive step that helps keep your credit history in good shape.

Keeping tabs on your credit health is vital, and these nine nifty tips are a great start to enhancing your credit score. From double- and triple-checking your credit report for accuracy, to managing your credit utilisation wisely, each tip can play a part in positively influencing your credit score.

Ozoomi has contacts with lenders who are specialised and have experience with people with a huge range of credit score ratings, so don’t worry. Even if you think your credit score could be better, Ozoomi is optimistic that together, the right car finance option is out there for you and your needs.