By Your Call Publishing | ,

Money Matters - August/September 22

Money On My Mind – The Martin Lewis Column

He’s the UK’s leading money saving expert - a journalist and presenter who has kept millions of pounds in people’s pockets as well as lifting the lid on the threats and dangers we need to be aware of as consumers.

In this month’s column, Martin Lewis looks at how we can repair our credit score.

Let’s be honest, the last couple of years haven’t been kind to our finances.

Brexit, Covid and the severe economic downturn that 2022 has presented us – one that is no greater reflected than at the petrol pumps – mean that our credit rating, as a unified nation, is at a record level.

The good news is the ability to rescue and repair that credit rating is within our own hands, and with a concerted plan we can get back to where we want to be. And that’s important – having a good credit rating means gaining access to preferential interest rates; it could be the difference between being able to buy a house, or rent a flat, or not; and it also gives us peace of mind that if an emergency crops up, we can lean on financial support.

When it comes to improving our credit score, the first thing we need to do – and it’s the one thing we don’t want to do – is check our current rating to see just how the lie of the land is. You can’t be certain you’ll improve your score unless you know what it is in the first place, so check out your credit file – with the likes of Experian or Equifax – and know what you’re dealing with.

When you’ve done that, the hard work begins, and the first step is to disassociate yourself from others who may be pulling you down with their own chequered credit history. Look into removing a partner (particularly an ex-partner!) from your file, as their activity will negatively impact on yours.

Next, get yourself signed up on the electoral roll. It’s a great way for credit agencies to be able to verify who you are and adds a layer of authenticity to any application.

Spring cleaning your finances is another really sensible option. Many of us have old credit cards or bank accounts that we don’t use yet they hum along in the background. They may seem harmless on the face of it, but they all represent risk as far as your credit score is concerned, so make sure you close all unwanted credit cards, store cards and debit cards.

Next, rather than obsessing over your credit history, why not start investing in your credit future. Using a credit card may seem a peculiar way of improving your credit but done sensibly it will. And by sensibly, I mean use it for everyday purchases on the specific understanding you’ll clear the balance at the end of each month. Doing this will boost your credit rating and prove to any lender that you can be trusted; but be regimented and pay this, and all other bills, on time. Making late payments sounds the death knell for a good credit rating, so stick to your payment promises and move forward.

Finally, if an opportunity presents itself to go above and beyond where payments are concerned, do that. So, if you can’t afford to clear your full balance at the end of the month, at least pay off more than the minimum payment.

Mending your credit score won’t be achieved overnight, but once started on a concerted plan, you may find yourself making quicker progress than you imagine… and your future self will thank you for your efforts today!