Martin Lewis has offered crucial advice for those looking to enhance their credit-worthiness ahead of Christmas, particularly if they’re considering taking out a loan or applying for a mortgage in the new year. The consumer advocate clarified there isn’t a definitive ‘credit score’ in the UK, but Experian, Equifax and TransUnion are the three firms which provide access to your credit report.
On this week’s Martin Lewis Money Show Live on ITV, the financial expert encouraged people to check their credit report – which can be done for free – at least once each year. This is to ensure the information held on file is accurate and there are no discrepancies which could be affecting your chances of getting approved for credit cards, loans and even an overdraft. He also shared 10 ways to boost your ‘credit score’, some of which can be done in just a few minutes.
Martin informed viewers that consistent answers are required on every application, including your job title and mobile number. He explained there are two reasons for this, the first being “lenders like evidence of stability” and inconsistent answers can trigger “fraud scoring”. He also advised people use an eligibility checker before making an application as this will only be counted as a soft search on your credit file, while an actual application will appear as a hard search.
Lewis highlighted the impact of credit applications on your financial profile, cautioning: “Applications are hard searches, they go on your file and lenders can see them and it has a negative effect. Too many in a short space of time has a very negative effect, so go to an eligibility calculator, which will tell you which card you’re most likely to get and give you odds, it uses a soft search which goes on your credit file but lenders are not allowed to see it so it doesn’t affect the assessment of you.”, reports the Daily Record.
He further advised that excessive applications could lead to more rejections due to the volume of searches on your credit file. Emphasising the benefits of using an eligibility checker, Martin explained that it helps you “hone in” on the card you’re most likely to be approved for. Additionally, he shared his top 10 tips for enhancing your credit-worthiness. Catch up with the Martin Lewis Money Show Live on STV Player or ITVX, and for a comprehensive guide on improving your financial appeal, check out this week’s newsletter at MSE.com.
Martin Lewis’ top 10 ways to boost your credit-worthiness
Martin shared the top 10 ways to boost your credit rating. These include:
- Using consistent answers on every application
- Using an eligibility checker to shop around for the lender most likely to accept your application
- Using an online app to track rent payments made on time – Canopy and Credit Ladder
- Making sure you are on the electoral roll – especially if you have moved home
- Never missing a repayment, including buy now, pay later purchases
- Making sure any linked purchases are not affected by your partner’s, house/flat mates credit-worthiness
- Applying at the right time – if you are applying for a mortgage or another big loan, don’t utilise all your credit or go into an overdraft to make yourself more appealing to lenders
- Don’t apply for little loans before a big one such as a mortgage to minimise searches on your credit file
- Never withdraw cash on credit cards – it’s expensive and goes against your affordability checks
You can catch up with the Martin Lewis Money Show Live on the STV Player or ITVX. In this week’s MoneySavingExpert (MSE.com) newsletter, Martin also does a deep dive into boosting your financial appeal – you can read it online here.