- 1. Use a Store Card
- 2. Report Rental Payments to Credit Agencies
- 3. Use Credit Builder Apps to Build Your Credit Score
- 4. Switch to a Credit Meter to Report Utility Payments
- 5. Get a Credit Builder Loan
- 6. Set up Direct Debits on Bill Payments
- 7. Get on the Electoral Roll
- 8. Review Your Finances & Bills After a Breakup
Building your credit score can be a complicated matter and most of the advice remains the same no matter where you turn to gather it, until now! In this post, we will dig into some of the more unconventional ways to give your credit score a lift. The truth is, having a good credit score opens the door to financial freedom and stability – something that every hard worker deserves to achieve. We’ve covered steps to take to repair bad credit and how to build credit the right way, but there are a few other ways to build your credit score that you may not be aware of.
1. Use a Store Card
A store card is essentially a credit card that can only be used at a particular store. It allows you to purchase an item and settle the balance later. Be careful not to confuse a store card with store-branded credit cards or rewards cards that can be used anywhere.
Store cards can be useful for building credit if you have a thin credit file or a low credit score because they are often quite easy to obtain. There are some cases where getting a store card is an instant process when checking out at the till meaning they don’t run a credit check for approval. If you mind the account enough to keep a low balance and make regular on-time repayments the store card will indeed help build your credit history. We suggest setting up direct debits to ensure that no repayments go missed. Store cards do often carry high interest rates and mismanaging the account can cause your credit to suffer.
2. Report Rental Payments to Credit Agencies
Rent is one of the most common regular payments people make but they don’t usually count towards your credit score. However, if you are renting you can use apps like CreditLadder to report your rental payments. CreditLadder allows you to report your rent payments to the UK’s two biggest credit agencies, Experian and Equifax. If you are already making rent payments for a flat then you may as well leverage those on-time payments to boost your credit score!
Your payment history is one of the largest factors impacting your credit score. Lenders and credit agencies look at how you’ve managed bill payments in the past to understand your trustworthiness. Using your rent to build up this payment history can help boost your credit score.
3. Use Credit Builder Apps to Build Your Credit Score
Aside from apps like CreditLadder, you can also use credit builder apps to build your credit score. To start building your Experian credit score with Portify, just take the steps below and we will do all the hard work for you!
- Download the app on Google Play or App Store and sign up as a member in less than 5 minutes.
- Pay your monthly membership fee on time. We deduct each payment securely from a bank account of your choice.
- Each on time payment builds your credit history. We report your monthly payments to our partner, Experian. Experian is one of the most well known credit score agencies in the UK.
4. Switch to a Credit Meter to Report Utility Payments
Moving from prepayment to a credit meter for utility payments is an easy way to build your credit score that is often overlooked. Switching away from prepayment to an old-style credit meter or a smart meter allows you to begin making regular monthly payments instead of topping off whenever you need to. Regular and on-time monthly payments are then reported to credit agencies resulting in an improvement to your credit score.
Switching to a credit meter can harm your credit score if you fail to make payments on time so be sure to manage your expenses closely.
5. Get a Credit Builder Loan
Have you ever heard of credit builder loans? They were specifically designed to help hard workers build their credit score. If you’re approved for a credit builder loan, the lender puts an agreed amount of money into a lender held bank account. You then make regularly scheduled payments at a fixed amount over a certain period of time, usually 6 to 24 months, to pay back the loan and interest. The lender then reports on time payments to credit agencies which can lift your credit score over time. It’s important to note that you cannot access the account until you have repaid the loan and any interest charged in full. This is because it is for the sole purpose of building credit. The amount you’ll need to pay back depends on the size of the loan and the interest rate.
The best part about a credit builder loan is that the lender will return the total balance (sometimes including the interest paid) at the end of the term.
6. Set up Direct Debits on Bill Payments
In case you haven’t noticed the trend, most credit building tips have to do with making regular and on-time bill repayments.
Consider setting up direct debits to show regular bill payments rather than making ad-hoc payments. Direct debits for bill repayments will allow you to “set it and forget it” while also avoiding expensive late payment fees. It’s important to closely monitor your current account balance if you choose to enroll in direct debits. If your balance is lower than the amount owed then you may end up dipping into your overdraft which can end up costing you more.
Portify members can better plan for upcoming bill payments with our instant alerts when your bank balance falls low.
7. Get on the Electoral Roll
Getting on the electoral roll is one of the quickest and easiest ways to improve your credit score. Doing so can be done in 5 minutes and completely online. All you need is your basic information – you don’t even need your National Insurance Number.
Being on the electoral roll is yet another way to build your credit score because it allows lenders to quickly and easily confirm your identity.
8. Review Your Finances & Bills After a Breakup
Simply put, make sure your ex is your ex financially too! It is not uncommon for partners or significant others to want to help each other if one has a poor credit rating. An example would be taking out a mobile contract for a partner with bad credit. Even if they are making the monthly bill payments, the debt is your responsibility if the contract is in your name. In the case of a separation, make sure you verify that monthly payments are being made or the contract is transferred out of your name. Unfortunately, your credit score will suffer if your partner fails to make bill payments for a contract that is in your name.