Credit score is a numerical value that ranges between 0 and 1000. It plays an important role in determining the financial products you have access to and the interest you pay for loans. Every person has three sets of credit scores each recorded by Credit Reference Agencies (CRA) Equifax, Experian and CallCredit.
Each of these agencies calculates the credit score based on different criteria and they categorize different ranges of credits as ‘excellent, good, fair or poor’. High scores translate to excellent credit score and make you eligible for more loan options. Having a decent credit score makes you appear as a ‘reliable’ borrower.
Is it possible to apply loans with low or bad credit score?
A person with low credit score has limited financial options. In case of financial emergencies there are short-term loans available at comparatively higher interest rates. These loans don’t require credit checks and have very few eligibility requirements making it ideal for those who also don’t have a credit card.
Payday loan amount typically ranges between 100£ and 1500£ and can be used to cover rent or medical emergencies. They have to be paid off within few weeks or few months. If you are looking for payday loans with fair interest rate check out LOANPIG.CO.UK. They are one of the top short-term loan lenders and have high loan-acceptance rate.
How to improve my credit score?
When you apply for loan, money lenders review your credit file to determine if you are a reliable borrower and will pay off the money on time. At some point in life we may require loans and a good credit score makes you eligible for more mainstream loan options that are available at low interest rate. Use these tips to boost your credit score.
- Include your address for identity verification: Lenders verify your identity before offering loans. When you register your proof of residency with the 3 credit rating agencies, you appear more reliable.
- On-time payments: Credit files reveal information about your loan history. If you are someone who makes late payments often, it will obviously bring down your chances of being approved for loan. You need to henceforth make on-time payments to show that you are trustworthy.
- Start building credit history: Young people and those who don’t have much experience with credit have a thin credit file. There is very few information on their credit file which make lenders apprehensive about granting loans. Start by purchasing a credit card and prove that you pay back the borrowed money on time.
- Avoid exceeding credit limit: Your credit limit increase over time. Try to use less than 25% of your credit limit every month.
- Request for credit limit increases only if absolutely necessary: Requesting for credit limit increases often would make it look like you have a difficult financial situation.
- Avoid taking many loans: Applying for many loans in a short span of time is a sign that you are facing financial difficulties. Avoid applying for many loans.
It takes a solid amount of time to increase your credit score. Stay patient and review your credit file periodically.