The Loqbox 12 days of Christmas

Christmas is just around the corner. Hooray! Time to get the hot chocolates out and cosy up with a good classic movie. 

Before you say it, we know that credit scores aren’t exactly the most ‘Christmassy’ thing in the world, but what better than heading into the new year with a stronger handle over your finances? Saves the mid-January scaries, the Sunday scaries’ winter cousin!

Today, we’re going to rework a classic to make Christmas credit-friendly. Let’s put a Loqbox twist on it, though, and see if we can learn a little about credit and how to get you moving towards a richer life in the process. Sounds good?

On the first day of Christmas, my true love said to me, "Get on the voters’ register"

The first thing you can do to give your credit a boost is sign yourself up to the voters’ register or electoral roll. This is the system that means you can vote in the UK, but what it does for the credit reference agencies is show that you have a consistent address, which means you’re trustworthy!

On the second day of Christmas, my true love said to me: "Pay all your bills on time"

The credit reference agencies want to see proof that you can be a safe pair of hands. Your bills are another bit of evidence that they’ll use to gauge how likely it is that you’ll pay off any loans you may have in the future. Our top tip? Pay your bills on time and make sure you never miss a payment.

On the third day of Christmas, my true love said to me, "Take control of your accounts"

Missing a payment because you don’t have enough money in your account is a very common way that people lose points on their credit score. It’s easily done if you have a few different accounts that you use for various things. A good place to start could be to have a dedicated bills account that all of your regular outgoings go through, and make sure this account is always topped up.

On the fourth day of Christmas, my true love said to me, "Avoid CCJs"

If you can, try to avoid County Court Judgments or CCJs if you’re on the journey to improve your credit score. When you get a CCJ for missing a parking fine, for example, this will go down on your report, which lenders will see. Sometimes these fines are difficult to avoid, and that’s okay. Just keep your council informed of the situation and make everything visible. There are people who can help.

On the fifth day of Christmas, my true love said to me, "Build credit div-er-sit-y"

If you have a range of credit on your file, it’s another brilliant way to improve your credit score. It’s all about having a varied portfolio. Different forms of credit show lenders that you can manage multiple lines of credit without defaulting. Just stay within your means and use credit sparingly.

On the sixth day of Christmas, my true love said to me, "Check all three credit reference agencies"

There are three credit reference agencies, or CRAs, in the UK: Experian, TransUnion and Equifax. These agencies all measure credit scores slightly differently and have different parameters for what makes a ‘good’ one. It’s best to keep an eye on your score for all three of these because the chances are it will vary.

On the seventh day of Christmas, my true love said to me, "Keep your credit utilisation low"

Credit utilisation is the percentage of credit that you're using across all your borrowing credit. If your utilisation is low, it tells lenders that you're managing credit well, spending within your means, and that you're responsible. That translates to a healthy credit profile. Good credit utilisation is often considered anything between 10 and 30 percent of your available credit. If you have a credit card limit of £1,000, try to spend and pay off between £100 and £300 of that a month.

On the eighth day of Christmas, my true love said to me, "Pay off your credit cards each month"

Paying off your credit cards in full every month shows the CRAs that you are a dependable borrower, someone who knows their limits and spends within them. That’s exactly what they’re looking for. Only spend what you can afford to pay off each month.

On the ninth day of Christmas, my true love said to me, "Space out your credit applications"

Applying for credit will usually mean that you have a hard search on your credit report. Hard searches are when a lender checks your credit file thoroughly to ensure that they are happy with your record before they lend you the money. This hard check will affect your credit score. Try and space out your credit applications to avoid incurring negative points from hard searches.

On the tenth day of Christmas, my true love said to me, "Use soft searches where you can"

A soft search is when someone looks through your credit report to see if you are reliable and can pay back loans. The difference between a soft and hard search, though, is that a soft search doesn’t leave a mark on your credit profile. When a comparison site, or lender, asks to do a soft search, you don’t need to worry.

On the eleventh day of Christmas, my true love said to me, "Automate your bill payments"

Setting up Direct Debits and standing orders for your bills can make things a little easier to keep track of if you’re struggling with your payments. This means that as long as you have the correct funds in your account, then you won’t need to worry about making payments on time, and you can focus on other areas of your credit report.

On the twelfth day of Christmas, my true love said to me, "Build a long-term credit file"

The older your credit file and the healthier it is, the more trustworthy you look. It shows lenders that you have a wide range of credit history and can be trusted over a long period of time. It’s the little-and-often model: show you can pay off credit over large periods of time, but don’t rely on it.

Then in the New Year, my true love said to me: "Watch your credit score rise"

Now you have 12 top tips to make your credit record healthy in the new year, there's no stopping you! Come back into the new year with a couple of wins under your belt and the motivation to start working on a few more areas! You’ll be boosting your credit file in no time.