How to Improve Your Credit Score

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By Cai Bradley
Updated on Thursday 17 August 2023

Credit score on laptop

A credit score – also known as a credit rating – becomes an increasingly significant part of your personal finances as you enter adulthood, as it has a strong bearing on your eligibility for loans, mortgages, and even mobile phone contracts.

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Understanding credit scores and reports is a must for everyone looking to get their finances in order and borrow money from lenders, but what if you want to boost your credit rating?

If you recently checked your credit rating and found that it was well below what you were expecting, or if you’re planning on applying for a mortgage soon, you may want to work on getting a better credit score.

But how do you improve your credit score? Our guide explains all the main ways to build your rating (it may be easier than you first thought!) and the reasons why you should do so.

If you’re new to credit scores and reports, you may want to read our beginners guide to UK credit scoring before trying to improve your personal rating.

Ways to improve your credit score in the UK

There are many ways to improve your credit rating and creditworthiness, including the following:

  • Pay your bills on time

  • Spend on your credit card little and often

  • Register on the electoral roll

  • Remove any negative financial associates

  • Close any unused accounts

  • Limit your credit applications

  • Only borrow what you can afford to repay

  • Keep your credit card balances low (credit utilisation)

  • Clear excessive credit card debt

  • Check your credit report often

Your credit score is simply a number that’s calculated by considering each of the factors within your credit report, so making certain changes to these factors will inevitably influence your overall score.

Some changes will lead to positive improvements to your credit score, while others – such as becoming financial associates with someone who has a poor credit history – could damage your score.

Spending on a credit card little and often

You can build a credit history using a credit card by spending little and often on it.

When you use a credit card and pay the balance on-time consistently, you are building proof of your reliability as a borrower, which is essentially your credit history.

If you continue to manage your credit responsibly, credit reporting companies – also known as credit reference agencies or CRAs – will notice your regular payments and reward you with a better credit score, which will, in turn, lead to a variety of benefits.

Remember to use your credit card sensibly and be careful not to let your credit utilisation percentage get too high, as explained below.

Credit utilisation – your debt-to-credit ratio

When you take out a credit card, your credit utilisation – sometimes referred to as a debt-to-credit ratio – refers to the percentage of your allocated credit limit that you have used.

For example, if your credit limit is £2,500 and you have spent £375 on your credit card, your credit utilisation for that month would be 15%.

You should aim to keep your credit utilisation relatively low, as many lenders and credit reporting companies will see it as a positive if you aren’t overusing your card.

A high utilisation rate is often viewed as a sign that you are relying too heavily on credit and could be facing financial difficulty.

Experian, one of the UK’s leading CRAs, recommends that you aim for a credit utilisation of no more than 25% for optimum results.

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Some simple steps for improving your credit rating

Look at credit cards for bad credit.

These specialist credit cards are easily obtainable, even by people with poor credit.

The interest rates are high and the maximum credit limit is low, but over time they can provide you with an excellent history.

Pay for your regular food shopping with one, and immediately pay it back (even do so with the app while you leave the supermarket!). This will build your credit history with the credit card company in a very good way.

Never miss a payment (always make at least your minimum payment) and never go over the limit (leave at least 10% of your limit free to cover interest and charges when they are added onto the balance).

Take out small, affordable contracts.

Mobile phones are the best example of these contracts. All mobile phone companies will do a credit check on you before they hand over your new smartphone, and all of them will report back to the CRAs when you’ve been reliable and repeatedly paid your monthly bills.

It takes time, and months have to pass before you have a history with them, but it’s worthwhile in the long run (plus you get a phone)!

Apply for an overdraft.

Consider applying for an overdraft, with the purpose of NOT using it. Like credit cards, having open credit available for you, even if it’s just a couple of hundred pounds, and then showing how good you are by not using it or only very occasionally dipping into it, is going to improve your financial standing in the eyes of the lenders.

Take out a small personal loan.

Like credit cards, personal loans are a godsend for improving credit.

Don’t get anything you cannot afford to pay back, and don’t just splurge the extra cash on wasteful things, but a small loan over a couple of years can help you build up to bigger things in the near future.

The best way to improve your credit score

The best way to improve your credit score is to attempt to utilise all of the tips that we mentioned above, but perhaps most importantly, to build a credit history as soon as possible.

If you follow each of our tips, your chances of getting a better credit score will increase tenfold, but it won’t happen overnight.

How long does it take to improve your credit score in the UK?

How long it takes to build a good credit score depends on a wide range of factors, but the most important thing to remember is that it won’t happen immediately.

Improving your credit score is a long-term process which is why most people are urged to start building a credit history from an early age, but once you start making changes by using the methods listed above, you should see your credit score climb over time. 

For example, information about new credit cards or bank accounts can take up to three months to reach Experian.

It can take a few months to see any real improvement on your credit report, but make no mistake that every method of building a better credit score that we have mentioned is worth considering, as they are all proven to work eventually.

How to improve your credit score immediately

You may want a shortcut telling you how to improve your credit score quickly or even immediately, but regardless of the changes you make to your finances, it will take some time for them to make a difference to your credit score.

You should also keep in mind that any emails or texts that you get out of the blue telling you how to improve your credit score immediately could be a scam, particularly if they’re pushing a sense of urgency, so be careful.

The benefits of having a good credit score

The truth of the matter is that you could survive with a bad credit score, but when you try to do any type of borrowing – whether it’s a mobile phone contract, car finance contract, a mortgage or a personal loan – it won’t come easy and it certainly won’t be cheap.

Building a good credit score will help you get your finances in order and could lead to a range of potential benefits, from getting better personal loan rates to being offered a more affordable mortgage.

With a good credit score, you are able to:

  • Qualify for lower interest rates and higher credit limits

  • Access better deals on credit cards, mortgages and loans

  • Improve your chances of being accepted by a landlord if you want to rent a property

  • Get cheaper car insurance rates (when paying monthly for cover)

  • Secure utility services without a deposit or ‘letter of guarantee’

Ultimately, with a better credit score, lenders will see you as a lower risk and you are therefore more likely to be accepted for credit.

Not only will your chances of being accepted for credit increase, but companies will also be more inclined to offer you better, more affordable interest rates and deals.

Why is it important to check your credit report often?

We recommend checking your credit report often, as it can help you better understand your current financial position and any improvements that you may need to make.

It allows you to be aware of what lenders see – you become aware of how they view your finances and it therefore makes you more inclined to make changes if needs be.

Checking your credit report often also gives you a chance to detect and correct any inaccurate or out-dated information that could be negatively impacting your credit score.

Check your credit score today and start improving it

Get started today by checking your credit score to determine your credit status and whether or not you need to work on improving it.

You can use Checkmyfile – an online multi-agency credit reporting website – to view your credit report from four of the main CRAs in the UK, which provides you with all the information you need in one place.

It is free for 30 days and £14.99 per month thereafter, but you are able to cancel online as easy as you can sign up:

Read our Checkmyfile review or browse our related articles for more information:

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