Improve your credit score by taking the following  five simple steps.

Step 1.

Check your credit report – Find out where you stand before you get started.  Other than your credit history, your loan application may fail for technical reasons, a mistake made on the loan application or because of an error on your credit report. Therefore, checking your credit report helps you find out where you stand and where you need to make improvements. It also gives you the chance to check for mistakes. Call Credit is the credit reference agency used by the credit unions in the My Community Bank network. A copy of your Call Credit Report is available from their free service, Noddle

Step 2.

Avoid making making multiple applications for credit – Every time you apply for credit or a loan, the potential lender looks at your credit history. Each time this happens, it leaves a footprint, or a “hard search.” If you have an unusually high number of searches on your credit report in a short space of time, lenders may view this negatively, feeling that you’re being rejected by other lenders or that you have too many financial commitments already. A good tip is to use services that provide “soft searches” – such as www.moneysupermarket.com They can tell you how likely you are to get a loan without affecting your credit score.

Step 3.

Build up your Credit History – Lenders look at your credit report to see if you have a reliable track record of repaying your debts. If you don’t have any credit (for example credit cards or loans) it will be difficult for lenders to make an informed decision and they may treat you as higher risk than you actually are. One solution is to take out a credit card with a low limit – use it for minor expenses and pay off the amount in full each month. This will allow you to build up credit history whilst avoiding interest on your balance by paying it off in full. Interest rates are often high for first time borrowers as well, so this can also help avoid costs.

Step 4

Keep up to date with payments – And finally, always pay what you owe on time. Late or missed payments for loans, credit cards or utilities are recorded on your credit report and stay there for years, negatively impacting your score – even if it’s just £1 you missed some lenders will see it as a “missed payment” regardless of the amount, and decline your application. To improve your credit score you should always pay on time, even if you can only afford the minimum payment.

Step 5.

Register to Vote – Lenders use electoral registers as one way to confirm your identity, so it’s a good idea to sign up if you’re not on there already – even if you don’t intend to vote.  But now that you have registered you might as well get involved. People died to make sure that you have that right.