Rising living costs have made it difficult for many people to maintain a healthy credit score. Increased costs have seen many people struggle to save and pushed them to rely more on credit, leading to higher debt.
Only 4.2% of people are unemployed (the lowest figure since 1975) in the UK, according to the Office for National Statistics (ONS). Despite this, rising inflation in the UK has seen more people struggle to pay their bills.
One of the best ways to improve your credit score is to make regular payments on time to your loans and credit cards. You should also keep your credit utilisation low, ideally below 30%. For example, if your credit card has a limit of £1000, you should try to use under £300 each month.
You may find you have a bad credit score, even if you aren’t in debt. This usually happens to younger people or individuals from other countries who don’t have much of a credit history. You can build a good credit history by getting a credit card and ensuring you always pay it off each month. Missing payments or paying back the minimum fee can affect your credit score.
Are you more likely to be denied from a credit check in 2024?
According to data obtained by The Guardian, 6.7 million people in the UK were in ‘financial difficulty’ in spring 2024. Costs such as mortgages, rents and energy bills have risen over recent years, which has put increased strain on households.
Lenders will look at your credit score to see how much of a risk it would be to lend to you. This means that your credit score will impact whether you are accepted for a credit card or a loan.
With more people struggling to keep a good credit score, there has been an increase of people denied loans. A bad credit score can also prevent you from getting a mortgage, car finance or an overdraft if you are deemed too much of a risk.
Why are you more likely to be denied?
Lenders will look at your application and credit history before deciding whether to lend to you. A poor credit score may indicate to the lenders that you won’t be able to keep up with repayments, which indicates you may be a high-risk customer. Not only could it be difficult for the lender to get their money back, but you could also face financial difficulties and potentially legal trouble.
You may be denied a loan because you don’t have a debit card. Many lenders require a debit card so that they can set up a standing order to your account for repayments. You could also be denied a loan if the lender can’t confirm your identity or address. It’s helpful to register on the electoral roll to help improve your credit score and which allows lenders confirm your personal details.
Lenders are more likely to deny your application if you’ve made lots of loan or credit card applications in a short time period. Multiple loans could suggest you’re seriously struggling with your finances and not good at money management. Equally, no credit history also means you’re an unknown to lenders and they won’t know how good you’ll be at repaying your debt.
Is it hard to improve your credit score?
It can seem like a mammoth task to improve your credit score, but there are several steps you can take to improve the process. Missed payments and court judgements will continue to impact your chances of getting accepted for a loan or credit card as they stay on your credit report for six years.
How to boost your credit score?
The most straightforward step to boosting your credit score is to have a credit card and consistently repay what you owe each month. Ideally, you should repay everything rather than the minimum amount to further improve your score.
You should try to minimise the number of credit applications you make. Ideally, you should make just one credit application each month. Having lots of loans or credit cards at once can be a red flag to lenders and they are more likely to decline your application.
It’s helpful to look at your overall money management to help create healthy credit habits. There are various saving strategies you can implement to help you.
Top tips
It’s a good idea to try and improve your credit score before you apply for credit. This could mean reducing the number of credit cards you have or making sure you make repayments on time each month.
It’s not the end of the world if you can’t improve your credit score as quickly as you’d like. QuidMarket can supply bad credit loans to people aged between the ages of 23 and 65 who live in the UK. You must also have a valid mobile number, a current UK bank account with a valid debit card and be employed with a take-home salary of at least £1,250 per month.
Our team manually check applications to ensure the repayments are sustainably affordable for you. We’re a FCA trusted lender and will consider applicants even if they have been denied loans elsewhere. Although we can’t guarantee you will be accepted, we try our best to provide flexible and affordable loans to applicants. You could be approved for a loan between £300 and £600 if you’re a new applicant or up to a £1500 loan if you’re a returning customer. (Please note – you should only apply for the amount you need)
If you’d like support with applying for a loan or making repayments on a current loan with us, please contact usand our team will be more than happy to help.
