A SAVVY saver has revealed a simple mistake that could have a huge impact on your credit score – and how to fix it.
The finance enthusiast, who regularly shares savings tips to his 22.2k followers, say your address should be kept up-to-date to prevent this mistake.
In one of his latest videos, he began: “This small mistake could be having a large impact on your credit score.
“If you’ve moved homes, it’s easy to forget to update addresses on old accounts.”
However, having inconsistent addresses can have a huge impact on your credit scores, the TikToker points out.
He also says it’s important to check your credit files with all of the credit reference agencies such as Experian, Equifax an TransUnion.
Each reference agency has its own scoring system based on your financial data and how good you are at managing your debts.
Ratings usually range from poor to good, very good or excellent.
“Your credit file will show all open accounts,” he added.
“Simply check them one by one to make sure they are all up-to-date.”
This advice is echoed by credit score experts, who say having out-of-date or incorrect address can raise alarm bells with lenders.
James Jones, head of consumer affairs at Experian said: “Good financial housekeeping can certainly be a factor in helping you grow and maintain a healthy credit score.
“If your address changes make sure to notify all the organisations where you hold an account and also check your credit report a few months later to avoid problems further down the line.”
How to boost your credit score
Seemingly tiny mistakes can have a major impact on your credit score, which could stop you getting a loan, credit card or mortgage.
If you miss any payment on household bills such as water or broadband as a result of not updating your address in time, this will have a huge impact on your credit score.
A single missed payment stay on your credit report for at least six years and can damage your credit score badly.
Experts says a good way to boost your credit score is to make sure you are on the electoral roll.
Setting up direct debits to make sure your bills are paid on time is another way you can improve your score by showing lenders you’re responsible with your money.
And try not to max out your credit cards – if possible, you should use no more than 30% of your available credit limit.
It’s worth checking your score to see how you’re doing too. TransUnion’s Credit Karma service gives you free access to your report and score for life.
Checking in means you can spot any mistakes and get them corrected to.
How to improve your credit score
WE explain how to improve your credit score.
- Don’t make too many credit applications – Making lots of requests in a short period of time can be seen as a sign of financial distress – and each application will be recorded on your file. Use a “soft-search” eligibility calculator to show how likely you are to be accepted.
- Always pay your bills – Late payments are also recorded in your file so make sure you pay your monthly bills on time including utility and credit cards.
- Pay down your debt – Try and cut down your existing debt before applying for new credit as lenders may be reluctant to lend to you if you already have a large amount of debt.
- Use a credit-builder credit card – These cards tend to have high interest rates compared to normal cards but if you can show you’re a responsible spender with them, it can improve your chances in the eyes of lenders.
Fiona Anderson, Managing Director of Consumer Solutions at Equifax said: “Bank statements or utility bills going to your old address are an obvious security risk, but there could also be a hidden cost if inconsistencies on your credit report make it harder for you to apply for credit in future.”
She says the quickest and most reliable way to change your address in your credit report is to update your details on the electoral register.
“This list of everyone who is registered to vote in public elections has details of your name, address, and date of birth, and gives lenders confidence that you are who you say you are and live where you say you live,” she added.
Looking to improve your credit score? We round up nine ways to increase your rating including registering to vote and credit builder cards.
Meanwhile, we explain whether checking your credit score can lower it.
Plus, here’s how you can get a mortgage if you’ve got a poor credit score.
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