We all have a credit record and it can be really important to make sure that it is as good as possible. However, it is not always easy to know what we can do to improve it. Different lenders that use the credit report may have different ideas about what makes a credit record good or bad and so it is not always easy to get it right. However, there are some things that you can try which could help.
Make Sure it is Correct
The first think to check is whether your credit report is actually current. You can look at it for free and you will be able to look at the details and make sure that they are right. You may find that there are things on there, such as outstanding loans or contracts that perhaps you have now paid off or cancelled and so that will need to be changed. So, if you find something wrong then make sure that you get it changed. This should mean that once it has been corrected, your credit score will improve.
Have a Good and Regular Income
It can really help if you have a regular income and that you get paid well. Obviously, this is not always possible and is not something that you can change immediately but it is worth bearing in mind. A lender will want to check and make sure that you will be able to repay a loan or if it is a landlord or utility company, they will also want to see that you have the resources to make payments. This means that if you are self-employed or in temporary employment it may work against you. If you want to borrow a significant amount, perhaps a mortgage, then it is worth considering changing your income source as this could work in your favour.
Make Regular Payments
If you can show that you are capable of making regular payments then this will help you a lot. You will be able to prove to potential lenders that you are responsible enough to keep paying for things month after month. This is something that they will be looking for. Therefore, if you have your name on a utility bill and always pay it all or on a loan such as a personal loan and the repayments are always met, then this could work in your favour. However, any missed payments will go against you in most cases. It is felt that some lenders like it when you have missed the odd repayment because they feel that if you do that with theirs then they will be able to profit from you more. However, it is unlikely they will all feel like that.
So, it may be the case that having a personal loan could help. If you are repaying it on time then this could show that you are trustworthy. However, if there is a risk that you will miss a repayment or perhaps several, then this could be a problem if the lender is looking for a perfect repayment record. If you miss a lot then it could put off every lender. Also, it is risk taking out a loan to try to improve your credit record as you can never be sure that it is and you will have to pay out money for that loan, which may just not pay off. If you have loans already, borrowing more may also not look good. So although there is a chance that borrowing and showing that you can repay loans can be a good idea, you need to make sure that you are not taking too much of a risk as it could backfire on you.