How to get a good-value home improvement loan

I love my home very much, but it’s funny how in winter, I seem to notice more and more the things I’d like to change. I guess it’s because we spend more time indoors, but when I look around at my kitchen, garden, bathrooms and the house in general, I could quickly draw up a Christmas wish-list of things I’d like to change, or, at the very least, enhance.

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You can’t have it all, and these things can cost a truck-load of money. However, if there is something that really jumps out at you, which will prevent you from sleeping properly at night unless it’s done, then I’m always a believer that money shouldn’t be the thing to stop you, even if it means turning to loans in order to fund it. After all, home improvements and renovations add value, so in this case a loan is helping to fund an investment, not an indulgence.

Of course when it comes to personal loans, you don’t want to rush into one for the sake of it, and you want to ensure that you’re getting a good deal in order to make this investment in your home worthwhile. The big factor in determining the interest rate you’ll get is your credit rating. I am always amazed at how badly understood credit scores are, and while different lenders may assess them differently, the fundamentals generally stay the same.

More importantly, ensuring that yours ticks all the right boxes isn’t hard at all. Here are a few handy tips to help you out:

• Pay bills on time: No matter how small the bill, make sure it gets squared away on time. Remember, your credit report covers six years, so any late payments will stick for a long time.

• Control your credit cards: Maxing out your credit cards and overdrafts, or even just ticking along at 75% of the limit, will make you appear as a greater risk to a lender. Use your credit card each month, but make sure it’s paid off by the end of it, as opposed to just doing minimum payments.

• Don’t appear credit hungry: Every time you apply for a loan with a provider, it leaves a footprint on your credit file. So, by all means shop around for quotes, but be careful of applying for a loan in too many different places at once, as it can negatively affect your score.

• Demonstrate reliability: Most people don’t realise that no credit history is every bit as bad as a poor one. Make sure you have active lines of credit, along with things like mobile phone contracts. Just be sure they’re always paid off in time.

• Raise the limits: A cheeky way to get a leg up is to get the highest limit you can on credit cards and overdrafts, and then underuse them. Get as big a limit as you can, and then keep your spend down to a handful of pounds each month. Lenders will love you!

• Get on the electoral roll: This is so important. Make sure you are registered on the voters’ roll, even if you’re not interested in voting. Doing this will allay fears of transience in the eyes of lenders, as you’ll then be definitively registered to a permanent address. And, best of all, it only takes a couple of minutes to complete the sign-up form on gov.uk.

So there you have it – 6 quick and easy ways to give your credit score a boost. You never know when you may need a bit of financial help, whether it to be to fix something in your home that’s broken, or to make those long-awaited improvements you always wanted. By making sure your house is in order with your credit file, you can rest assured that if or when the time comes to apply for a loan, you’ll get it at an affordable rate so it never becomes a burden.

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