How To Improve Your Credit Score

Car finance is a great way to get behind the wheel of the car you both need and want, making the otherwise unreachable more affordable through monthly payments, instead of a big lump sum upfront. We help customers finance their next car on a daily basis here at West Motors. However, as we’ve previously talked about, taking on finance for a used vehicle requires the lender to delve into your credit history to ultimately determine whether or not to lend money to you, and the deal you get depends on your score. 

Whilst it’s still possible to take out car finance with a credit score that isn’t the best, we recommend getting your credit score to the healthiest level possible. Here we explain what a credit score is, how to access and improve it, and how important it is to your car finance journey… 

What is a credit score? 

Think of your credit score as a financial CV, with a number attached to it that rates your credit-worthiness based on this information. It shows how reliable you are when it comes to borrowing money and paying it back on time. 

Your score is kept by three main UK credit agencies, Equifax, Experian, and TransUnion, all with varying score systems but using the same information to generate it. This is gathered from the likes of banks, mobile phone companies, utility providers and local authorities to generate an overall picture of your financial situation. 

How important is a credit score? 

The more you make payments on time in your day-to-day life, the more trustworthy you will be to prospective lenders. Therefore, when it comes to taking out credit, such as car finance, a mortgage, and loans, you will be more attractive to more lenders, and they’ll be more likely to lend you more if they can see you’re a safe bet. If you’re looking to make a big purchase that requires credit, it’s very important indeed. 

How can I improve my credit score? 

Financial health is something that you can make changes within your daily life to work towards if your credit score is looking a little sorry for itself. Here are some ways in which you can look to improve your credit score… 

Check your credit score for inaccuracies 

The first step to tackling your credit score is to see where it currently stands, and while you’re there, ensure you check that all the information within it is correct. Even if your address isn’t as it should be, it can have a knock-on effect on your score, so make sure all the information is spot on.

Check whether or not your credit file is linked to someone else too through a joint bank account or mortgage. Their credit score can affect yours, so if the situation changes, ensure you contact the credit agencies in order to get this link removed so they no longer have an impact on your score. 

Use a credit card - but not to withdraw cash

A credit card is a great way to show how good you are at paying back money that you’ve borrowed, by always making repayments on time. It can be tempting to use a credit card a little too much but keep spending low and regular and it will make positive changes to your credit score. 

That said, withdrawing cash with a credit card is a no-no; credit agencies can see these withdrawals as far back as 6 years ago, and in any case, the interest rate is high, so it’s not the most cost-effective way to get cash in your hand. 

Pay your bills on time - and upfront, if you can

It may be obvious, but it’s one of the easiest ways to improve and maintain a good credit score: paying your bills when you should. It shows that you can manage your money well, and are therefore a financially reliable person. 

This goes for insurance too; pay for insurance such as pet, car, home and life insurance upfront as opposed to monthly instalments, and it could improve your credit score.  

Avoid debt collection

Debts large and small can prompt debt collection, so even if you think you’re the last person to open the door to bailiffs one day, ensure that there aren’t any outstanding payments to be made on any account you’ve ever opened. 

Register to vote

Believe it or not, being on the electoral roll can improve your credit score by reassuring lenders that you are who you say you are, and removing the question mark over your identity that could put lenders off allowing you to borrow. 

Apply for car finance at West Motors in West London 

With years of experience in helping those who seek a stunning used car to fund it with car finance, the team here are both knowledgeable and approachable if you need help understanding how it works. 

A credit check is available for free through our website, and can help show you whether your car finance application would be accepted. Simply get started by finding a car you like, and following the prompts you find at the bottom of the screen. 

If you’re curious about finance but don’t know where to start, why not visit our dealership or give us a call? Find all the details you need here.