How to boost your credit score with a secured loan

Last post: Aug 1, 2017

Making careful use of a secured loan could help you improve your credit score – great if your numbers need some massaging. Here's how it works.

 A perfect credit score is not something we're all naturally blessed with. From forgotten payments to tricky periods in our financial lives, there are lots of reasons why our credit rating may not be squeaky clean.

And it's not just negative credit events which can lead to our credit scores being less than fabulous, not having a proven track record of using credit responsibly (simply because you have had no need to make use of it) will also leave your credit score in a less-than-perfect state.

But there are some steps you can take to start giving your credit score an overhaul...

Proving you are a responsible credit user by taking on credit, then repaying in a careful, timely way tells credit agencies that you can make wise use of such products and repay your debts. This technique will help boost and even repair your existing credit rating.

So how does it work?

Firstly, you'll want to make use of a low interest financial product in order to minimise the overall cost of this credit score-boosting practice. Secured loans typically have a much lower level of interest because they are (normally) secured against your property, making them a much less risky proposition for lenders. If you have a property and feel 100% confident of meeting repayments, this makes secured loans a good option for improving your credit score.

The rest is pretty simple. You set the repayment terms with your lender (shorter terms and smaller amounts usually mean lower interest which is ideal for these purposes). Then take on and repay the loan, meeting every repayment precisely on time. Once the loan period is complete, you should see some improvement in your credit score.

This could help you source credit in future, for instance when buying a home, or if you should find yourself in need of short-term, emergency finance.

From £1,000 to £250,000, our secured loans are available with very flexible repayment terms to suit your requirements. From boosting your credit score to funding home repairs, we help clients from all backgrounds (with an array of credit scores) make use of secured finance. Talk to us to learn more and arrange a secured loan today.