Top tips to improve your credit score

15th August 2018

By Kurt Wood

Whether you need a loan for a car or you’re applying for a mortgage to buy your first home, having a good credit score will always work in your favour. Not only does a better rating open up more possibilities of borrowing, but it also gives you access to better deals on the market.  

Your credit score has a big impact on your life. And not just the obvious stuff like mortgages, loans and credit card applications. A bad credit rating can mean your bills are more expensive, because utility companies aren’t sure you’ll pay on time – or at all. 

There are even some jobs that you won’t be able to get with a bad credit score. So don’t underestimate it. 

Top tips for improving your credit score 

You can’t fix your credit score overnight. It takes months or even years of sensible spending. But you can make a good start by doing these things: 

1. Get on the electoral roll

Getting on the electoral roll proves your name and address. This makes your ID easier to verify, so your credit score gets bumped up a bit. 

This should be your first stop if your credit score’s in bad shape. 

2. Pay bills on time 

Late bill payments have the same impact on your credit score as late credit card repayments, so it’s massively important to pay them on time. It’s easier to do this if you set up a direct debit. 

3. Pay down your debt 

Before you take on more debt, have a go at paying off some of your existing debt. Even if you pay off everything on time, lenders don’t like to see too much credit on your file. 

There are different approaches you can take to paying off debt. Two popular ways are: 

The snowball method: this means paying off the smallest balances first. Smaller balances can be paid off easier, which means you’ll get rid of some outstanding debts clogging up your credit report..  

Highest interest first: by paying off the highest-interest debts, you’ll free up cash by cutting your monthly costs.  

4. Consolidate debts

Consolidation is industry jargon for moving all your outstanding loans to one big loan. In theory, this single debt is simpler to manage, and overall you pay less interest. 

Loan consolidation can also give you a boost if your credit report’s looking a bit ropey. Lenders don’t just look at your total debt, they look at the number of outstanding debts you have, too. 

By moving all those little debts into one big loan, you’ll immediately look a more attractive prospect. 

If you’ve got loads of credit cards, you can get the same benefits from a balance transfer card

5. Use credit cards responsibly

If you pay off credit card balances in full and stay below 30% of your credit limit, you won’t find yourself tangled up in difficult credit card debt. 

If you manage this, having a credit card will do your credit report good. Using a credit card responsibly shows you can pay off credit on time, every time. 

Credit builder cards are designed specifically to help you build up your credit score. So if yours is looking unhealthy, these types of card might be worth looking into: 

Credit builder cards – These cards are designed for people with bad credit scores, so providers are a little less strict about 

0% balance transfer cards – transfer multiple balances into one and take advantage of 0% interest deals.  

Quick ways to improve your credit score

There’s no overnight fix to a bad credit score. But there are some quick things you can do to give your score a boost. 

Pay twice a month – creditors only report balances to the credit bureaus once a month. So if you max out your balance but pay it in full, it could look like you’re using up 100% of your available credit (even if you pay it all off in time). Making payments twice a month dresses up your “credit utilisation ratio”, which can lift your score.  

Increase your credit limit – As a rule of thumb, never use more than 30% of your available credit. If you can get an increase on your limit, you can tweak the percentage of credit you use, and this can get you closer to the magic 30%. Just don’t keep spending once you get your credit limit increased.  

Become an authorised user – you can’t jointly apply for credit cards in the UK, but you can be an authorised user on someone else’s card. It doesn’t always improve your credit score, but it can help.  

Keeping an eye on your score 

Rule one for improving a bad credit score is to monitor it carefully. You can check your credit online using any of the three UK credit reference agencies:  

Experian (free and paid membership options)  

Equifax (free and paid membership options) 

 CallCredit (free for life, plus a free credit report service with giffgaff) 

Protect your credit score with eligibility tools 

If you want to improve your credit score, make sure you’re not damaging it further by applying for credit you’re never going to get. Every time you apply, a “footprint” is left on your file, and these hang around for three months. 

The more you get rejected, the less lenders will want to give you credit. 

We’ve got a few eligibility calculators that can help you choose products that you’re more likely to get, so take a look at our loan eligibility calculator and credit card eligibility calculator

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