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Building a strong credit score is the key to being an attractive borrower for lenders, as it shows that you have been reliable with debts in the past. 

More than 50 million Americans have either no credit score, or have such a limited record that they would struggle to secure a loan. 

Even though many lenders offer no credit check loans, it is best to put some work into improving your score, and there is a time lag of about 6 months with credit scores. Best to get started now! 


What Is A Credit Score, And What Does A Good One Look Like?


A credit score helps lenders decide whether to approve an individual for a loan. A credit score is represented by a number between 300 and 850 and reflects how reliable a borrower you have been previously. In the US, the average score is around 698, and you can check your score via the FICO website. The higher your score the better, but don’t worry – you will be able to locate a loan even if your credit score isn’t ideal. 


Credit Score Is A Spectrum

Your credit score is a number between 300 and 850 – the higher, the stronger!


Do I Need Debt To Build A Credit Score?


No! One common means of building a credit record is by paying back debts on time, but there are plenty of other factors which feed into your score. 

Improving your credit score can be simple. For example, you could link a regular payment, like a direct debit to Spotify, to your credit report. There are lots of available financial products, including Experian go, which helps you to link accounts in your name to your credit report. So, if you’re paying for Netflix, Hulu, Youtube, or Prime on a regular basis, this could be helping your credit score! 

If you don’t have such subscriptions, you could link utility or phone bills to your record and reap the same benefits.


acquire a credit card

There are plenty of ways to improve your credit score. Having a credit card in your name is one.


What Else Can I Do To Better My score?


You could become an authorized user on somebody else’s credit card, who already has strong credit. For many, this is a parent, sibling or friend. If you are amassing debt on someone else’s card, you should ensure you will be able to pay it off to protect your relationship.

One steadfast way to strengthen your credit score is through using your own credit card. You can set limits on your spending abilities to ensure that you spend sensibly while improving your credit history. 

Otherwise, you could apply for a secured credit card. For this product, you need to put down a deposit to acquire the card. Your line of credit will generally match the deposit you’ve put down. Let’s say your deposit was $100, your line of credit will be $100, too. 

You could join the electoral register. While it may seem unrelated, the electoral register records your personal information, which verify your identity for lenders making it easier for them to approve you. This is totally free for you to do, acting as a benefit for you and your potential lender. 

In any case, when aiming to improve your credit score, don’t miss payments! These scar your credit record for up to 6 years, and work against you. If you know you will struggle to meet your living costs, you could consider seeking an alternative loan, or asking a loved one for help. 

Will Low Credit Impact The Terms Of My Loan Agreement?


Yes, but don’t worry. Plenty of borrowers have experienced financial troubles in the past. In fact, 75% of payday loan borrowers have taken one out before. You will, most likely, be able to secure a loan with poor credit, it just may be slightly more expensive because of your credit score. 

This is because lenders are lending money to borrowers who have been known to default on payments. As such, they may charge higher interest on loans to such borrowers. As long as you pay back your loan as quickly as possible, this shouldn’t be too damaging, but it is something to keep in mind. 

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