If you’re new to borrowing or have had a few late payments, you could find yourself with a less than satisfactory credit score. But the good news is, getting your report in good shape is normally easier (and quicker!) than you think. And even better, having a good rating is one of the best things you can do to get your personal finances on track. Not only does it make you more appealing to lenders, it can also encourage good financial habits.

Here are five top tips to help people improve their credit rating:

Wake up and smell the bad credit

As with so many things, admitting you might have a problem is the first step to recovery. Lots of people are completely unaware of their rating and how it affects them: our own research found 40 per cent of people never think about it.

This is important because old or incorrect information can lower your score. You can find out what’s on your report easily by signing up to free trials with providers such as Experian.  If you find a genuine mistake, you can get this amended too. Although all correct information, even if it gives you a black mark, can’t be altered. For these cases you can ask for a ‘notice of correction’ to explain the blip to providers looking at your rating i.e. missed payments due to redundancy.

Update as much as possible

Make sure you always end all financial associations with ex-partners. If you are newly divorced or separated you could find your ex-partner’s details are still on your report, which can impact your score. Whilst their own credit rating won’t impact yours, any product you took out jointly will. Similarly, people often change jobs or move house without updating their records – if you’ve made any big life changes tell your financial providers as soon as possible.

It’s all about YOU

Keep all bills, financial transactions, loans etc. in your own name. This will help you build your own rating, rather than your partner’s or your flatmates’ – having financial contracts in your parents’ names won’t help you build your own credit profile.

Demonstrate good behaviour

Good financial behaviour is ALWAYS rewarded. One of the best things you can do to make yourself look attractive to lenders is pay your bills on time or even ahead of schedule. 

Don’t apply for more than one credit product at a time – evidence of multiple incomplete applications can have a negative impact on your rating. Wait for a response before asking another provider. Try and end the year on a high having reduced your borrowing to ensure you’re in good shape for the year ahead.

Keep it up

There are quick fixes, such as joining the electoral role, (which many people don’t realise is actually essential for a good credit rating) but some things will take time. Showing you can repay on time each month and not overspend both need to be demonstrated over the long term.

Don’t be afraid to ask for help. Ask your friends and family what they’ve done. Experts at the credit agencies can also talk you through the areas on your report you have concerns or questions about.

James Benamor is CEO of Amigo Loans.