I haven't always had a good credit score, I used to be terrible with money. But for the past 6 months, it has consistently stayed at 999 following a slow increase over the last couple of years. At first I thought it was a mistake because I do have a couple of late payments on my record from 2014 so I updated my details on there, made sure everything was correct and up to date and still it came back with this perfect score.
So how did I increase my credit score?
Firstly I am on the electoral role and have been for many years. If you are not already, register because it really makes a difference to your score. I am not 100% sure why, I'm not an expert but this shows up as a positive on my credit scores so definitely worth doing if you haven't already. It's super simple and you should be voting any way.
Keep Your Utilisation Percentage Down
I have paid off some debt, I have had a few different credit accounts -I think 4 in total - that have completely been paid off. I didn't however shut the accounts, this can sometimes negatively impact your credit score. This is because if Experian sees that you have for example £10,000 credit available, (So you could spend this amount if you were to max out every one of your credit accounts) but are only using £1,000 of credit, your utilisation of the credit available to you would be pretty low - which they like. If you shut an account and it meant you then only had £5,000 available credit but you still used £1,000 your utilisation would be higher because of the percentage of the credit available you are using. Hope you are still with me!
After a while credit cards can be closed by the company after a few years of inactivity, I would say let this happen - as I have. If you have been paying off debt over time and working on increasing your score, you don't really need to keep these accounts open any longer.
This also gives you a bit of a push to pay off your debts faster. Don't just stick with the minimum payment each month. Not only will it cost you a bomb in interest but the quicker you can get your credit utilisation down, the quicker you can get your credit score closer to the 900s.
Do Not Miss Payments
In the last 4 years I have not missed a payment, this is so important. As soon as you miss a payment your credit score will drop drastically and there will be a mark on your credit file. You do not want this. So just keep up to date with your payments and make sure you always have enough money to cover them.
I know this can be hard if you have found yourself in a bit of a downward spiral with your debt but speak to your bank and see if they can help, or even a family member if you are lucky enough to have that kind of support available to you. I did go through a time at first when I was really struggling and I did miss a couple of payments because I just didn't have the funds to cover them but as I paid off more of my accounts as fast as I could, more income was made available to me to continue paying off other accounts in larger amounts. Then just be patient and continue this great work to get your score back up. It will be worth the struggle in the end.
Don't Apply for Credit Unnecessarily
Don't apply for credit more than necessary. Each time you apply for credit, such as a new credit card or a finance, your credit will dip. Now I would say this is worth it if you are getting the credit card to use it to your advantage and to increase your credit score (I will get to how to do that in a moment) but if you are just getting loans for frivolous purchases then just stop. It's not worth it, from being someone who used to get loans for silly purposes to now someone who wants to live a completely debt free life I can tell you it's so much more worth it to just save your money.
Optimize a Credit Card
So credit cards, I have two. I have one that I do not use, it is completely paid off. I have about £1,500 available to me on this particular account but as I do not use it, the credit company can see that my utilisation is low, which again they like. My other card I pay for absolutely everything on; my groceries, my treats, my bus ticket - everything. I then pay it off in full every month. My particular credit card also earns me points with a well known travel company so I get money off holidays as well when I use it. But using my credit card in this way shows Experian that I can keep up to date with payments each and every month whilst still keeping my utilisation low. I think this is the biggest difference as I noticed the largest jump after a couple of months doing this.
I think at the end of the day as well, you just have to be patient. It can be so frustrating and sometimes disheartening at times when you are on this journey but just stick to it and keep making good financial choices and you will get there I promise.