Created by: Dave Harland | 18 March 2019

7 ways to protect your credit score as a student

A credit score is used by lenders to assess the level of risk in lending to you. The better your credit score, the more likely you’ll be offered reduced interest rates and cheaper monthly premiums in the future.

As a student, it’s likely that your credit score is low because you’re still young and you have a short credit history. But don’t panic as there are lots of ways in which you can improve your credit score fast.

1. Register on the electoral roll
The easiest way to boost your credit score is by putting your name on the electoral register. This way, lenders can identify you and rule out any fraudulent activity.

2. Apply for a credit card
If you haven’t got a credit card, you’ll probably have a low credit score. This is because there’s no evidence that you can pay the money back on time. Taking out a credit card and setting up a direct debt to make payments will help create a good picture of you.

3. Take care of your own mobile contract
If your parents or carer pay for your mobile contract, it’s a good idea to start paying for it yourself. Opening a contract up in your own name and making the payments every month is an easy way to improve your score and show lenders that you can meet payments.

4. Stop applying for extra credit
If you need extra cash, it can be tempting to apply for lots of credit but if you’ve been rejected for credit, this will show up on your credit file and could affect your ability to borrow in the future. If you’ve got a low credit rating, stop applying for loans and cards. Instead, concentrate on improving your credit score by making repayments on time and clearing current balances.

5. Avoid taking out any payday loans
Payday loans can be tempting to tide you over until your next student loan arrives but you should avoid them at all costs. The interest rates can be very high and if you can’t pay back the full amount, your credit score could be affected.

6. Keep up to date with payments
Credit reference agencies record data on utility and loan payments. So, make sure you pay all of your bills in your student property on time.

7. Close old bank and credit accounts
If you’ve got an old account still open, lenders may think that you have access to more credit than you need. Contact your provider and close all accounts that you don’t use.

The important thing to remember is not to panic. If your credit score is low, there are a number of things you can do that will protect it while increasing your chances of being accepted for credit in the future.

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