A SAVVY saver has revealed a simple mistake that could have a huge impact on your credit score – and how to fix it.
Josh, who goes by the username moneyconfidentuk on TikTok, warns that not changing your address after moving could affect your credit score.
The finance enthusiast, who regularly shares savings tips with his 22,200 followers, says your address needs to be updated to avoid this error.
In one of his latest videos, he began, “This little mistake could have a big impact on your credit score.
“If you’ve moved, it’s easy to forget to update addresses on old accounts.”
However, having inconsistent addresses can have a huge impact on your credit scores, the TikToker points out.
He also says it’s important to check your credit reports with all credit reference agencies such as Experian, Equifax and TransUnion.
These companies compile information based on your financial history and your ability to repay credits such as mortgages and credit cards.
Each reference agency has its own rating system based on your financial data and your ability to manage your debts.
Ratings generally range from poor to good, very good or excellent.
“Your credit report will show all open accounts,” he added.
“Just check them one by one to make sure they’re all up to date.”
This advice is echoed by credit score experts, who say an outdated or incorrect address can raise alarm bells with lenders.
James Jones, Head of Consumer Affairs at Experian, said: “Good money management can definitely be a factor in helping you develop and maintain a healthy credit rating.
“If your address changes, be sure to notify all organizations where you have an account and also check your credit report a few months later to avoid further problems.”
How to increase your credit score
Seemingly small errors can have a major impact on your credit score, which could prevent you from getting a loan, credit card or mortgage.
If you miss a payment on household bills such as water or broadband because you didn’t update your address on time, it will have a huge impact on your credit score.
A single missed payment stays on your credit report for at least six years and can seriously hurt your credit score.
Experts say a good way to boost your credit score is to make sure you’re on the voters list.
Setting up direct debits to ensure your bills are paid on time is another way to improve your score by showing lenders that you are responsible for your money.
And try not to max out your credit cards – if possible, you shouldn’t use more than 30% of your available credit limit.
It’s worth checking your score to see how you’re doing too. TransUnion’s Credit Karma service gives you free access to your report and score for life.
Registration means you can spot errors and have them corrected.
How to improve your credit score
WE tell you how to improve your credit score.
- Don’t over-apply for credit – Making a lot of requests in a short period of time can be seen as a sign of financial distress – and each request will be logged in your file. Use a “soft-search” eligibility calculator to show the likelihood of you being accepted.
- Always pay your bills – Late payments are also logged on your file, so be sure to pay your monthly bills on time, including credit cards and utilities.
- Pay off your debt – Try to reduce your existing debt before applying for new credit, as lenders may be reluctant to lend to you if you already have significant debt.
- Use a credit generator credit card – These cards tend to have higher interest rates compared to normal cards, but if you can show you’re a responsible spender with them, it can improve your chances in the eyes of lenders.
Fiona Anderson, general manager of consumer solutions at Equifax, said: “Bank statements or utility bills sent to your old address are an obvious security risk, but there could also be a hidden cost if inconsistencies in your credit report makes it difficult for you to apply for credit in the future.”
She says the quickest and most reliable way to change your address on your credit report is to update your contact information on the electoral register.
“This list of everyone registered to vote in public elections contains details of your name, address and date of birth, and gives assurance to lenders that you are who you say you are and live where you say you are. live,” she added.
Looking to improve your credit rating? We’re rounding up nine ways to boost your rating, including registering to vote and credit builder cards.
In the meantime, we explain whether checking your credit score can lower it.
Plus, here’s how you can get a mortgage if you have bad credit.
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