Having multiple accounts with multiple credit providers has the ability to affect your credit score quite substantially. It signals that you have a bigger need for credit and that you may be more vulnerable if your financial situation were to change. In this case, consolidating your accounts into one could have a number of benefits ranging from increasing your credit score to making it easier to manage your repayments.
Missed or late payments for credit products such as home loans, car loans and personal loans could decrease your credit score. However, by making regular, timely repayments, you will begin to develop a consistent repayment history which can help improve your score over time.
As simple as it may sound, a common mistake is that people forget to redirect their mail to their new address when they move house; resulting in lost mail. This lost or forgotten mail can build up and over time equate to unpaid bills. Utility providers such as your mobile and electricity services can be quick to place a default on your credit file if your bill goes unpaid for over 60 days, causing your score to drop. The easy fix? Make sure you never miss a bill by having your mail redirected to your new address or moving to electronic communication only with the provider.
Payday loans can offer quick financial relief, yet each time you make an enquiry for credit, regardless of the amount, your score will fall. If you are not in any immediate need to obtain a loan or can obtain the funds via saving, these might be worthwhile alternatives to avoid your credit score being adversely affected. In the long run, your credit score will start to increase as these defaults ‘drop off’ your credit file, usually in 5 – 7 years.