Building your credit score for the first time

Building your credit score for the first time

They often say that having no credit history is just as bad as having a poor credit file. The reason for this is that lenders will not have information about how credible you are. So, they will choose not to lend to you. It can be a little bit frustrating for those who have chosen not to own a credit card and maintain a good budget, living within their means. The trouble is that you have not shown lenders that you can borrow money and pay it back on time. This is critical when it comes to securing a mortgage. Below, we will take a look at some of the things you can do if you are building your credit score for the first time. 

Make sure that all of your personal information is correct

The first thing that you need to do is obtain a copy of your credit file and make sure that all of your personal information is correct. Any inaccurate data, such as an incorrect address, could end up hurting your credit score. This is because there may be inconsistencies that mean the credit checking agencies are prevented from extracting all of the relevant data about your account. 

Register for the electoral roll 

If you are not on the electoral roll at present, the simple step of registering can have a positive impact on your credit score. This is one of the easiest ways to give your file a kickstart. 

Use a credit card to build your credit history and credit score

Lenders want to see that you are a trustworthy person to lend to. They want to be confident that if they lend you money, you will pay it back. This is why your only option is to take out a credit card and make the full payment every month so that you can show lenders that you are credible. As you have never had a credit card before, you will find that you are very limited in the cards available to you. Most will have a small borrowing limit and high-interest ratings. Choose with care and pay off your balance every month so that you do not get hit with a significant interest charge. 

Avoid applying for lots of different credit cards – it hurts your credit score

While you need to apply for a credit card to get the ball rolling, do not make lots of applications. Every application you make will show on your account as a hard search. Too many hard searches within a period of time indicate that you are relying on credit. This can end up decreasing your score.

Hopefully you now know some of the different steps that you can take to boost your credit score and build your rating for the first time. Do note that it can take a little bit of time for the changes mentioned above to be reflected in your credit account. Nevertheless, if you maintain good lending habits and follow the advice provided, you should notice that your credit score continues to rise. 

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