Whether you're looking for a credit card, loan, or even a mobile phone deal, your credit score is important - find out whether phone contracts improve credit score, how to improve credit ratings.
The are numerous factors that can have an impact on your credit rating and credit score. These can include, a loan, a mortgage or even a new mobile phone contract. Playing an important part in whether or not you get accepted for credit and therefore, the deal you want.
Don't panic if your credit score isn't perfect – our top tips could help you to improve your credit score and make your credit report look more appealing to potential lenders.
Step-by-step on how to improve your credit score
Check your credit report and amend any details that aren't correct.
Make sure you're on the electoral roll
Get your name on some household bills, pay them on time
Close any outstanding credit accounts you no longer use
Try to consolidate any debts
Build up a history of responsible borrowing
But don't apply for too much credit in a short space of time
Be careful of credit repair companies
Check your credit report regularly
Protect your identity
Lenders look at your credit report when you apply for a loan, credit card, mortgage or any other type of credit account to see what you already owe, how well you're keeping up with your repayments and whether you can afford to borrow more.
Checking your credit report can help you to improve your credit score because you can check how accurate it is and that it reflects your circumstances.
If you haven't done so already, register to vote at your current address - lenders use the electoral roll to check that you live where you say you live, so it can help to improve your credit report.
If you aren't registered or are listed at another address, the lender may ask for further proof of your identity and address, or could even turn your application down.
If have a history of paying your bills on time it can help to improve your credit score.
However, if you miss payments or don't make them on time, as well as incurring penalties, a note will stay on your credit report for at least three years - which could give a bad impression to lenders.
It can help to improve your credit score if you close any credit accounts you don't use.
When looking at your credit report, lenders take into consideration the amount you could borrow, not just what you actually owe.
As a rule, it's better to have a few well-managed accounts, than a lot of accounts which you don't use.
Consider consolidating your debts - identify which of your credit accounts are most expensive and see if you could consolidate them into a one, lower-cost loan.
This won't directly improve your credit score, but it could your debts more affordable right now (though, generally consolidating debt costs you more in the long run and should always be approached with caution).
But if this enables you to close several credit accounts you struggle with, it could help improve your score as you'll have fewer accounts open.
Each time you apply for credit and a lender looks at your credit report, a record of their check called a 'footprint' is made. If other lenders see a lot of footprints on your account in a short space of time it may hurt your chances of getting credit.
Keep the number of footprints on your credit report down and it could help to improve your credit score.
Many people struggle to get the credit they want, not because they have a bad credit history, but because there isn't enough information on their credit report for lenders to go on.
Lenders want to see evidence that you're a responsible borrower and if you haven't taken out many credit accounts before, this history won't be there.
Exercise caution when it comes to credit repair companies claiming they can improve your credit score.
Credit repair companies claiming that they can remove or change the data on your credit report often charge hefty fees and may not be able to deliver on their promises.
Check your credit report regularly to make sure that all the information it contains is correct. If you notice any errors, you can contact the relevant lender and ask for them to be corrected - you will be expected to provide proof that a mistake has been made.
If you have a good reason for any credit problems, for example if you were ill and couldn't make your payments on time as a result, you can add something called a Notice of Correction to your account.
Potential lenders will be able to see this explanation - again, be prepared to provide proof.
Check your credit report regularly for unfamiliar or suspicious entries, like a new account you didn't open, an increase in the amount you owe which you can't explain or new applications for credit you didn't make - these could all be signs that you've been a victim of identity fraud.
With the growth of technology and a developing need for communicating easily and efficiently, the number of people with a mobile phone contract is increasing. As so many now own a mobile phone, this is a bill that many are likely to have as a continuous monthly outgoing.
The monthly fee that you pay for your mobile phone contract can be seen as a form of credit, as you're essentially paying for credit of a service. For many contracts you may need to pass a credit check to even take out the initial contract, although there are some contracts where this won't be required.
Like other bills that you might have, you will be contracted to pay a specified amount each month. Therefore, should you miss a bill or make a late payment, this will impact your credit score and have a negative effect on your credit rating.
Any defaults that occur as as result of missed payments for your phone contract, can have go on to effect future applications for credit. So much like other bills, your phone contract can effect your credit score, either in a positive or negative way.