For years credit scores have been used to calculate the ability or tendency of a person to repay certain loans, debts and bills.
The idea of a credit score emerged back in 1956 when engineer Bill Fair and mathematician Earl Isaac decided to start FICO.
They aimed at creating a standard and impartial credit scoring system to encourage fair lending practices in the world. This allowed lenders to assess a person’s credit history more accurately and efficiently.
However, credit scores as we know them today, have been manipulated, exploited and have caused people some severe financial problems.
If you’re one of them, don’t worry, you’re not alone. We at Salad Money use a new and fair method of affordability assessment for our loans.
We aim to provide fair loans to NHS and public sector workers, without needing a strong credit score. Now you too can get a loan regardless of your credit score.
However, that doesn’t mean your credit score isn’t important, with many other lenders still using similar systems. With that in mind, in this article we’ll look at how we can improve your credit score in 2022.
Before we dive in, let us understand how credit score works in the UK.
Credit Score Explained
Your credit score refers to a three-digit number that is assigned to every adult in the country based on their credit history.
Credit rating companies such as Experian and Equifax can provide you with these scores after assessing previous loans, debts, repayment status and so on.
Simply put, if you’ve borrowed money through a loan or credit card and paid it back on time, you should have a strong credit score. However, if you haven’t, you may have what financial lenders call a “bad credit score.”
Regardless of what it is, we’re here to tell you that it can be improved, and if it doesn’t, you can still get fair loans with Salad Money.
Now, let us find out how a credit score affects you in the financial world.
How Your Credit Score Affects You
Your credit score is used to judge your reliability as an individual applying for a loan. Assessing a person’s credit score helps financial lenders determine the creditworthiness of a person.
This allows them to make cold, calculated decisions about how much they will lend you and over how long - to minimise their risk.
Credit scores are also used to analyse the amount of interest you’re charged on the borrowed sum. Therefore, improving your credit score can help you get credit cards and personal loans at a better interest rate.
Let’s talk about some tried, tested and straightforward ways to improve your credit score.
Top 5 Tips To Improve Credit Score
Make Sure To Pay Your Bills / Loans On Time
The first step to improving your credit score is to ensure that you are making all your payments on time. This includes monthly loan payments, mortgage payments, phone and internet contracts, credit cards payments, et cetera.
Find Out If You’re Linked To A Person With A Low Credit Score
If you are linked to another person through a joint account, this can affect your credit score. If the person you share an account with has a low credit score, this can cause your credit score to sink lower, so you may want to consider making changes to protect yourself.
Get On The Electoral Register
Ensuring that your name is registered on the electoral roll, can help you get credit more easily. This is because it makes it easier for credit rating agencies to confirm your identity, reducing the risk of lending to you.
This is a really quick way to improve your credit score - all you need to do is log on to the government’s website and register for the electoral register.
Check For Mistakes or Fraud On Your Credit Report
Mistakes on your file can affect your credit score. Hence, you need to ensure that all your information is up-to-date. Moreover, if you find any incorrect information on your file, make sure you report it immediately.
When it comes to fraud, it’s much more common than you think. Therefore, it is important to thoroughly study your credit report and report anything that shows false information and could point to fraud.
Minimise Your Use of Credit
For a better credit score, try to use as little credit as possible. Generally, the more you borrow, the more your credit score sinks. However, it’s worth noting that the effects of this can be cut back by making sure you’re making your payments on time.
On the other hand, by borrowing in small amounts, such as with a credit card, this can put forth a good impression to lenders and lead to credit score improvement. Hence, use only as much credit as you truly need.
Fair Lending For NHS And Public Sector Workers With Salad Money
Are you a public sector worker who has been let down by the credit rating system? Well, you’re not alone and we’re here for you.
With our brilliant affordability assessment system, you can now get affordable and fair loanswithout having to worry about your credit score.
At Salad Money, we are dedicated to spreading the concept of fair lending with our open banking application process; thus, making it easier for you to get affordable loans without you worrying about your credit score.
To learn more about our loans and services, contact us at 0203 092 0896 or email us at email@example.com now!