Your credit score and history are kind of a big deal and any financial move you try to make, such as getting a loan, buying a car, renting a house, etc. will require a credit check of some sort. That can intimidate a lot of people - what is a credit check? What if your credit isn't good enough? Is this something you can control? Can you improve your credit, or make sure that you successfully pass the credit check? The good news is that yes, there are things you can do, so here is your guide to passing the credit check with flying colours!
Be Aware Of Your Eligibility
The very first step is to actually take the time to do some research and see whether or not you are actually likely to be eligibile for your personal loan, mortgage, etc. You can check your credit at websites like Equifax in order to see where you stand, exactly, whether you have good or bad credit, and what you can do about it.
Sometimes, it will be glaringly obvious that you are not actually eligible for your loan, in which case a credit check is not only useless, but actually damaging to your credit. You see, every time there is a credit check performed on you and every time you get rejected, your credit suffers a hit. But there are ways around that.
Perform Soft Searches
If the situation is not crystal clear and you don't know whether you would be accepted or not, a good trick to work around the system and not allow your credit to suffer is to perform a soft search. That enables you to do a mock-up and see if, in a hypothetical situation, you would be accepted or not. That can give you peace of mind and save your credit score from unnecessary hits. Remember: if you are not sure you will get accepted, applying for as many loans as possible is not the way to do it!
Improve Your Credit
Of course, if your score is not the best it can be, you can also take active steps to improve it. Here are just a few of the ways you can increase your credit score and improve your chances to gain eligibility for the loan you are seeking.
Pay your bills on time
You wouldn't believe the importance of something as simple as just paying your bills on time. You see, the later you are, the more that is going to affect your score, especially if you do it repeatedly. Make a point out of always paying your bills on time, in order to keep that rating high.
Repay previous debt
You're not going to make much progress on that credit score if your old debt is still dragging you down, will you? Before taking other steps, make sure that you pay off your debt or at least set up a plan to start actively repaying. If you struggle with debt or repaying it, Money Advice Service has excellent information.
Set up direct debits
Do you know how you can make sure that all of your payments make it there on time? By setting up a direct debit at the bank. That way, any recurring payments will be made automatically on the due date, and you never have to worry about forgetting or not being able to make the payments. Just make sure you always have enough money in your bank account.
Did you know that an excellent tool to improve credit is to actually get a loan? It seems counterintuitive, because we just discussed how debt is damaging your credit, but this is different. You see, if you make regular, successful payments you demonstrate good character and financial responsibility and your credit shoots up as a result. Getting a loan can be a very strategic move.
In conclusion, not only do you not have to fear a credit check, you can actually make sure that you can pass with flying colours! All you have to do is be aware of your situation and credit history and of the eligibility requirements and then start working towards building up that credit rating. It can be done if you exercise a little discipline and take some very important steps to "clean up" your credit, like getting rid of old debt and pledging to always pay your bills on time.