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Martin's 20 ways to be more attractive... (financially)

Who better to help you don your fiscal glad rags than our Martin, with tips to boost your credit score so lenders will look on with lust 

It's late at night. You're alone in your pyjamas in front of the computer, about to make contact. You press the button, but the lender takes one look at you and your credit file and says: "Sorry, you're not my type".

Catching a financial firm's eye is more art than science. Each lender scores you differently, for each product, based on its own wish-list of what makes a profitable customer as they're all turned on by different things.

So whether for a mortgage, credit card, loan, mobile contract, monthly car insurance or more - there's no one single solution to boost your credit attractiveness. Yet with a blend of knowledge and action, there are things you can learn which work for most...

1. Don't think your credit score is everything. Years ago some bright spark at a credit reference firm realised that instead of just selling data to lenders, they could sell it to consumers too - calling it a 'credit score'... even though in the UK you DON'T HAVE one uniform single credit score. 
              
What credit reference agencies give you is just their rough indication of how a typical lender might see you - even though all lenders score differently. It also misses out crucial earnings and affordability info, often the single biggest factor in lenders' criteria.

I'd still suggest you take a gander at your score, as you can do it for FREE via our MSE Credit Club (Experian score), and get free Equifax & TransUnion scores too. But focus on your overall ranking and don't obsess if your score moves a few points up or down, as some smaller actions (eg, cancelling old credit cards) are viewed by some as positive, others as negative. 

2. Use the same mobile number and job title on each credit application. Inconsistencies from application to application (even with different firms) can trigger a fraud fail - another form of rejection. I'm not saying it's a problem if your mobile or job changes... more, try to be consistent if it hasn't changed. See fraud scoring.

3. Understand they're trying to predict future behaviour. Lenders use your past behaviour to try to predict future actions. Take these scenarios and think about what you'd do...

A man walks into a pub. He's forgotten his wallet and asks if you'll lend him £20, which he'll repay tomorrow (and buy you a drink to say thanks)...

a) You know him. He does this often, has always remembered to pay back and has a decent income.   
b) You know him. He does this often, has always remembered to pay back, but he's lost his job and now has no income. 
c) You know him. He does this often, and usually forgets to pay back.
d) He seems decent... but neither you nor any of your friends have ever met him before.

My guess is you answered "yes, probably not, no and no". This is pretty much how credit scoring works: a good income and borrowing track record is best - a bad track record or low income makes lending less likely (or most costly). Equally, not having a credit history means lenders can't predict your future behaviour, so you'll likely be scored out too. 

4. Get paid to (re)build your credit history. If you've a poor history, or no history, the way to improve your credit attractiveness is to be a good credit citizen. To do that you need credit, but for many that's a catch-22.

Special credit (re)build cards are designed to overcome this. They're easier to get. So get one, do £50-£100/mth of normal spending on it (never withdraw cash) and repay IN FULL each month, preferably by direct debit, so there's no interest. After up to a year, provided you never miss a payment (or have issues elsewhere) your creditworthiness should improve.

Use our Poor Credit Eligibility Calculator to see which top cards you're most likely to be accepted for. This includes Aqua Reward (eligibility calc / apply*) which gives 0.5% cashback on all spending, but sadly doesn't currently include the Amazon Classic which pays new customers a £25 voucher.

These have a horrid 34.9% and 29.9% rep APR respectively if you don't repay in full, so please - always pay in full. 

5. Check your files every year - small errors kill big applications. I once did a TV money makeover for a woman looking to buy a house who couldn't work out why she'd been rejected for a mortgage. It turned out she had an old (technically active) but unused mobile still registered to her old home. That was the final straw killing her application.

So check every line on your files is up to date and correct, annually and before any major application. You can get your Experian credit file for free via our Credit Club, and check other files for free too.

7. Checking your credit file does NOT impact your creditworthiness. The fact you have checked your credit file (or used an eligibility calculator) will usually appear on the credit file YOU see, but as it's a soft search, lenders DON'T see it. So unlike applying for most products, it doesn't impact your future ability to get credit. 

8. Don't try finessing your income on applications. Lenders may verify your income and if it's wrong, you may be auto-declined. Plus a quick tip, always click the '?' that's by the income box on forms. Some firms want household income, others single, some want bonuses or investment income included. Check it so you get it right. 

9. Find out if they fancy you - it doesn't just affect acceptance; it affects rate. A credit score is a loose indication of your history. Yet, as noted, it misses out key info about whether you can afford to borrow - and each lender's attitude. 

When you apply, lenders don't use it alone to decide acceptance or rejection. For mortgages, loans and credit cards, many also do 'rate for risk'. So the better your risk, the better the deal you get. 

The best way to do this is just to ask: "Will I be accepted for the product?" An easy way to do that is using our eligibility calculators which show your odds of getting top deals - and unlike applying this doesn't negatively impact your future credit. So see how well you do using 'em... 

Eligibility calculators...
Cheap Loans | 0% Balance Transfer Cards | Cashback Credit Cards | 0% Spending Cards | Cheap Spending Abroad Cards 

10. Ensure you're on the electoral roll (without any junk mail). If you're not on it, getting credit's tougher, as it can cause ID and tracing issues. If you're worried about junk mail, opt out of the 'open' register, and then your details can't be used for marketing. See full electoral roll help (including what to do if you're not eligible for the electoral roll).

11. Get rid of unsightly unfair defaults. If there's one on your file (eg, you didn't pay a catalogue loan as the firm failed to deliver the goods), get it removed or it can torpedo your chances. See remove unfair defaults help, and even if it's fair, see how to mitigate the damage from defaults.

12. Space out credit applications. Applications (regardless of whether or not you get the product) stay on your file for a year. It's not just the obvious products - it can be mobile phone contracts, monthly car insurance, even gas & electricity direct debits.

Too many, especially in quick succession, can harm your creditworthiness, even if you're rejected. So do the most important first, then spread the rest.

13. Public displays of affection are fine, but beware joint mortgages, loans & bank accounts. If your credit file is linked to someone else, lenders can see their history when you're assessed, so if your partner has a bad credit history, be careful about being linked.

Linking is nothing to do with marriage, holding hands or sharing a bed - it's about whether you've a joint mortgage, loan, bank account and sometimes utility bill (not credit cards, they're always single accounts with a second cardholder).

- Wrongly linked or separating? See de-link your finances.
- Bad debts from ex-partner? See my Financial abuse and joint account worries blog.

14. Time it right - when you apply can have a big impact. Applications stay on files for a year - bad stuff (such as defaults and county court judgments), six years. So if these will soon lapse, wait until they do to apply and your file's clear.

15. Ensure existing credit card debts are as cheap as possible. In itself, cutting existing debt interest doesn't boost your credit score (though it does boost your coffers). Yet it means more of your repayments clear the debt - and less existing debt boosts acceptance chances. So if you're paying interest, check out doing a balance transfer.

16. Don't be scared to apply for a new product in case it "drops my credit score". I'm often surprised by people asking me whether they should apply to cut debt costs because "it may impact my credit score". This is a somewhat twisted logic.  

The point of being creditworthy is so you'll be accepted for credit when needed - there's no point in protecting your credit score for its own sake. 

17. NEVER miss or be late on repayments. Always use a direct debit to be sure, even if you just set it up to make the minimum repayment (then call up to pay more each month manually).

18. Withdrawing cash on credit cards ain't attractive. It's expensive for starters, plus lenders see it as evidence of poor money management. See Is it different for overseas cards?

19. Pay your rent on time and boost your credit score. The Rental Exchange Initiative launched in 2016, and records your rental payments (like mortgage payments are recorded), which are then added to your Experian credit file. To see how to access the scheme, read let your rent boost your credit score.

20. Payday loans are just plain ugly - but you may be able to remove them. Payday loans are not only hideously expensive, but some mortgage firms have been known to say openly that they'll simply reject anyone who's had a payday loan - as it's a sign of poor money management. 

If you've had one it's worth checking if you were mis-sold it - as if so, you may be able to ask for it to be wiped from your file.