5 Steps to Switch from a Fair to Good Credit Score

Having a low credit score may have a detrimental impact on your finances. It hinders your chances to utilise credit the next time. Individuals struggling with a fair credit history put their dreams on hold. This is because qualifying with insufficient or indecent credit history is challenging.

If you get a loan on a fair credit score, you get one with high costs. Individuals in university mainly struggle to have a good credit score. The primary reason for this is- dependency on credit cards. Students rely highly on credit cards for groceries, utility bill payments or other shopping expenses.

Similarly, employed individuals and unemployed find it hard to monitor and regulate a good credit history. If you can relate, the blog may help. It lists the strategies as to how to increase your credit score quickly.

Before that, let’s understand the most important point.

What are fair and good credit scores?

According to the largest Credit reference Agency Experian, “ Credit score 721-880 is considered as fair. A credit score between 880-900, is a good credit score.”

How to Boost your fair credit history to good?

Sometimes only getting a landline at your fixed space can boost your credit history. It grants assurance of your particular and fixed place. Here are other ways to boost your credit history from fair to good:

1)  Pay your bills timely

Unsurprisingly, paying your bills timely helps you build a healthy credit history. Lenders require the surety of getting their money back. Disciplined utility payments help you prove that. If you cannot do so, the respective companies may report it to the credit bureau:

  • Credit card provider
  • Telecom companies
  • Letting agents or landlords
  • Mobile phone companies
  • Loan providers

Thus, check your outstanding payments using a free credit report checker. It will help you analyse the debts. Strategise the debt payments using savings, money from investments or part-time jobs.  However, it may not seem sufficient every time. Check fair credit loans to settle some debts. Consolidate or pay at least 3 debts with the loan amount. It is ideal for individuals with a fair credit history. Eventually, your credit score will improve.

2)  Check important aspects ofthe credit report

Moving from a fair to a good credit score is easy only if you know the strategy. Your credit report reveals aspects like- payment history, employment history, and prevailing debts. Thus, before seeking any short-term loan, check the following aspects of your credit report:

  • Are your residential/office address correct?
  • Are your bank accounts listed?
  • Does your credit report reveal a bank account that does not belong to you?
  • Are you still financially linked with your ex-spouse/husband?
  • Does your profile still reveal a paid CCJ error?
  • Are there any credit applications that you know nothing about?

These aspects will help you know your finances better. It will help you plan things out accordingly. For example- if you still have financial connections with your ex-partner, seek removal. It may help you boost your credit score.

3)   Analyse and counter credit mistakes

Missed payments, defaults and CCJs are the worst credit mistakes that impact the score. There is no point in pretending if your credit report reveals dues. However, you must report unfamiliar or paid debts to the creditor.  For example- if you recently paid your bills but it still reveals unpaid status, contact the credit agency. Seek removal with detailed payment proof.

Besides that, avoid exceeding the credit card limits. It also impacts your credit score. Use credit cards carefully. These are ideal to grab a discount on big-ticket items. However, it may still prove costly. For example- if you want to purchase an air conditioner, compare the best ways to buy it. You may choose credit cards because of the offer they come with.

However, purchasing with external loans proves cheaper. Credit cards are high-interest debt that you must pay. Alternatively, get instalment loans for low-interest rates and terms. You may get an affordable quote due to a fair credit score. You can purchase an air conditioner and pay the dues in instalments. It eliminates any surprise costs with clear payment terms, monthly instalments and other costs. You can also set up direct debits for quick cash transfers to the lender. It helps you ensure regular payments and avoid penalties.

4) Add a notice of correction with future loans

Notice of Correction explains the reasons for having a compromising credit history. It lists the scenarios that provoked one to be out of a job or fall into high debt. The UK lending structure grants the freedom to the borrower to explain his circumstances for troubled finances. For example, you can write it in this way:

I was unemployed for a long time due to my serious knee injury. Limited income or earnings from part-time work were insufficient to meet the dues. Thus, I fell into the debt trap. However, I took a new job after 5 months. It helped me pay some of my debts – like credit card payments, loans for the unemployed, emergency loans, and utility bills. However, I must pay car finance dues and other interest costs to boost my credit rating. Please, oblige with a small cash help. I will share my recent income slip as affordability proof.

The statement or the notice would not affect your credit score. Additionally, paying the dues quickly after getting the job may prove positive for you. It will help you settle debts, update credit information, and improve the best mix of good debts- like student loans.

Later, with a good credit score, you may get loans at low interest rates and terms. Additionally, you share more options and flexibility to negotiate the terms with a strong credit history.

It may also benefit you on the insurance front. For example, if you get car finance at low-interest rates, congrats. However, you would need an insurance cover to get the loan. Thus, you can get insurance coverage with better benefits and low premiums with a good credit score. Isn’t it a win-win situation?

5)   Use credit cards responsibly

Even after several attempts, you cannot ditch credit card usage. It comes with perks and discounts that one hardly likes to give up. It is the reason individuals wonder. It is the reason individuals wonder:

How to improve your credit score with responsible credit card usage?

If you too want to know this, follow a few points:

  • Keep your credit utilisation ratio low
  • Avoid applying for credit cards unnecessarily
  • Transfer credit card debts to a balance transfer card and pay
  • Set up direct debits for credit card payments
  • Respect the credit card limit, do not exceed it.

Bottom line

These are some steps to improve your credit score from fair to good. However, ensure that financial changes, debt payments, and insurance coverage do not impact your budget. Otherwise, it may impact your credit further. The above-listed aspects help you achieve a good credit score quickly. All one needs is patience and effort.

Roscoe Tanner is the Editor-in-Chief, leading a large team of writers at LoansForever. He has expertise in writing for various borrowing options like personal loans, long-term and short-term loans, unemployed loans and many more. Roscoe joined LoansForever in 2015 but previously worked with many reputed loan companies. He performs the major role as the editor, covering key aspects of loans and finance. Roscoe Tanner wants to serve at large in the progress of the company and to present a modern alternative to the traditional financial industry in the UK. He is a Certified Financial Planner and has a god-gift of connecting with people through his valuable suggestions and writings. His expertise as a writer and editor in the finance industry is based on his education qualification. Roscoe has done a Master of Business Administration (MBA) in Finance.

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