There is no denying that your credit rating is likely to be one of the most important things in your life but a lot of people don’t spend too much time thinking about it. It is one thing being able to check your bank balance at any point and see how much (or how little) cash you have available to you, and that is a very tangible thing. However, your credit rating can have a huge impact on your ambitions and plans, so it makes sense to keep your credit score as high as you possibly can.

If your credit score is low, there are steps you can take to improve it but if you are looking to be proactive, here are some steps to avoid if you don’t want to damage your credit score.

Don’t forget to update your electoral roll address

This is extremely simple but it is a step that many people overlook. When it comes to checking your application, you will find that checking your address against the electoral roll is one of the first steps that a lender will take. If the name and address don’t match, you will likely be declined so this should be a step that you remain on top of.

Don’t forget to close off credit agreements you don’t use

If you have a credit card that you no longer use or which you have paid off, close it down. Lenders will often look at the amount of credit that you have available to you and if they think that you have too much credit, they will be wary about lending you more credit. Taking steps to close off credit options that you don’t use or really need will increase your likelihood of being able to obtain further credit or more relevant credit.

Don’t pay bills late

If you develop a reputation as someone that pays bills late, you will start to be viewed as a credit risk. It makes sense to pay bills on time or ahead of schedule. You can use direct debits to achieve this, making the process much simpler. When you have direct debits to pay off bills, all you need to do is make sure you have enough money in your account and if you do, that is all you need to worry about.

Don’t have a zero credit history

If you are looking to obtain credit, don’t go straight for a massive loan or an important loan. If you are looking to obtain a mortgage, it makes sense to have a credit card or two, and make sure that the bills are paid off in full and on time, to provide lenders with some confidence about your ability to pay bills on time. If you have no credit history, this can be as damaging as having a negative credit history so don’t overlook the importance of having some credit.

Don’t go to the max with your credit cards

If your balance on your credit cards is nearly at the upper limit, lenders will consider this to be a debt that is excessive. Ideally you should be looking to only use around a quarter of the available credit.

Don’t apply for credit too often

If you apply for credit too often, it is noted that this will be recognised by future lenders. If you have applied for credit and have been knocked back, you should leave it a while before you apply for credit again. The more times you apply for credit, the less likely it will be that you will obtain credit so be sensible when looking for credit.

Of course, if you are in a position where your credit rating isn’t the greatest and you wouldn’t obtain a loan from traditional financial institutions, don’t panic as help is available. You should look to avoid payday loans as much as you can but taking out a guarantor loan is a sensible and smart way to obtain finance if other options are blocked off for you. If you have other loan options available to you, pursue them first but a guarantor loan remains a smart option that can help you get your life back on track.