How to increase your credit score

Your credit score has a significant influence on how you get access to credit lines, such as loans, credit cards, and mortgages.

A strong credit score can provide several advantages when applying for a mortgage but don’t panic if you discover that your credit score isn’t stellar. Your credit score could improve over time if you put effort into it and practise wise money management.

Register to vote to prove where you live

You can register on the electoral roll at your present residence, regardless of whether you are living on your own, in shared accommodation or with your parents.

Make sure your bills are paid on time

One of the most important criteria in calculating your credit score is making your monthly payments on time. To guarantee that you never forget a due date, set up reminders on your phone/calendar or automated payments. Paying your bills on time consistently shows that you have good money management skills and can raise your credit score.

Reduce your credit card debt

Your credit score may suffer if you have high credit card balances compared to your credit limit. Maintain a credit utilisation rate (the percentage of your credit limit you are using) of no more than 30% if possible. If this is a problem for you, talk to your bank or read our article on creating and sticking to a budget.

Limit the number of new accounts you open

A hard check is made on your credit report each time you apply for a new credit card or loan. The rapid increase in queries may harm your score. This is because too many applications may be an indication of you struggling with money. You could also ask the lender to do a ‘quotation search’ instead of a ‘credit application search’. The ‘quotation search’ or ‘soft search’ won’t show up on your credit score profile.

Make sure your credit report is correct

Review your credit report meticulously to make sure there are no errors and to confirm the accuracy of the amounts indicated as owed on your accounts. Even small mistakes such as mistyped home addresses can affect your credit score and lending credibility. If you find any mistakes in the report, contact the provider directly and ask them to rectify the error. You can also use online tools like Experian to raise a dispute with them on your behalf. If there is negative information that is correct but happened during special circumstances (such as a period in hospital or losing your job) you can Experian to add a Notice of Correction to your credit report explaining this.

Check join accounts

When you apply for joint credit with someone, such as an overdraft, joint loan or mortgage – your credit history will be linked to theirs.

If you’re looking to improve your score, you may want to ask your partner, for example, to try to do the same, especially if they have a poor credit report.

Pay off debts

Work on paying off any debts you may have as soon as you can. If necessary, negotiate with creditors to establish payment agreements. Your credit report will be improved if you pay off past due obligations.

Leave open old accounts

Your credit score is influenced by the duration of your credit history. Your credit history will be shortened if you close older accounts, which can lower your total score. To keep a good credit history, keep older, well-managed accounts open.

Your credit rating

Be patient and persistent in your efforts to make positive changes since improving your credit score requires time and discipline. At the end of the day, by taking proactive steps and using the advice provided here, you can control your own financial path.

Check for fraudulent activity

If unauthorised individuals obtain your personal information, they may fraudulently apply for credit in your name without your knowledge. If you notice any inaccuracies on your credit report, like an unfamiliar application, contact your bank. You could also speak to the team at Experian or another software you are using to obtain your credit score.

Stay at one address for as long as you can

Lenders like to see stability in your personal circumstance so moving home a lot can make them think you have troubles with paying rent and negatively affect your credit score.

Build up your credit

Getting a credit builder card can help to rebuild your credit score. These cards usually have low spending limits and high interest rates so don’t on a shopping spree. Use them for small amounts each month then repay the card in full each month to avoid interest.