How to improve your credit score (2024)

Understand your rating

Before you start thinking about how to boost your credit rating, it is important to understand exactly what it is and how it is used.

Banks and other lenders look at your credit score when they are deciding whether to agree to any application to borrow money – this could be in the form of a loan or credit card, or if you are buying a new mobile phone contract.

There are three main credit reference agencies in the UK: Experian, Equifax and TransUnion. They hold data about your financial history, such as any debts you already have, which is known as your credit report.

This report is then used to generate a score to show your creditworthiness. Each reference agency has its own numbering system but the higher the score the better, and the more likely you are to have your loan application accepted.

Your score could also have an impact on how much money you can borrow and what rate of interest you are charged for it.

Check reports …

Read the report that each credit reference agency holds on you to make sure they are correct as mistakes could lower your score.

They typically offer several ways, free and paid-for, to check your record. You can go to their website and request a free copy of your statutory credit report.

How to improve your credit score (1)

There are several options for seeing your score for free. MoneySavingExpert’s Credit Club lets you access your Experian score. ClearScore will give you a score based on information provided by Equifax. Subscribing to Credit Karma lets you see your TransUnion score.

Paula Roche, the managing director of consumer solutions at Equifax UK, says: “Contrary to popular belief, checking your credit report will not change the score itself, so there’s no harm in taking a look, and it can be extremely empowering.”

… and correct errors

Common mistakes include having the wrong address on file or missing relevant information.

If you spot a mistake, contact your lender to ask it to fix it.

If that is unsuccessful, you can contact the credit rating agency to get it fixed or add a note to your report explaining that it’s an error.

Borrow – carefully

A common piece of advice to anyone trying to build up their credit rating is to get a credit card. While this helps to an extent, you need to be careful how you use it.

Using a credit card responsibly shows that you are likely to repay other debts, which will boost your score.

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The most important thing is the credit limit you are given – a high maximum will appear on your credit file and signals that other lenders have already decided that you are a responsible borrower.

However, you also need to think about your credit utilisation – how much credit you are allowed to borrow and how much you actually use. If you are given a credit card with a £1,500 limit, for example, you should stick to a self-imposed limit that is less than the maximum.

Experian recommends only borrowing up to 30% of your limit. If you regularly max out your card, that suggests to other lenders that you are relying on borrowing for everyday spending even if you pay it back each month.

James Jones, the head of consumer affairs at Experian, says: “The lower [your credit utilisation] the better – it is a reflection of how reliant you are on that credit.”

Regardless of how much you borrow, make sure you always repay it on time, otherwise you will be penalised.

Register to vote

Being on the electoral roll helps banks and other lenders confirm your identity. If you have recently moved home it makes sense to get on the register as soon as possible, even if there’s no election coming up. You can do this online using the government’s register to vote service.

Pay bills on time

The way you use your current account will also show up on credit reports, as will things such as whether you pay your phone and energy bills on time.

For example, it could affect your score negatively if a direct debit or cheque bounces or you go into an unarranged overdraft because there’s not enough money in your account.

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“Just try to keep your account in order – we’re only interested in borrowing, so if you have got a positive account we won’t see that,” Jones says.

To avoid any mistakes, consider planning your direct debits and standing orders to leave your account on or just after payday.

Split it

If you live with your partner, it might be tempting to let one person deal with all the bills. But that means that you won’t be building up your own credit score and can have implications for future borrowing, so make sure your name is on some of the bills.

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If you split up, you should also be thinking about how that will affect your credit score, particularly if you had joint borrowing such as a mortgage. Don’t assume that your credit profiles will be unlinked after you break up, even if you get divorced.

“If you have been in a relationship and linked up your credit rating then going through a divorce will not sever that link,” Jones says.

Once you’ve closed the joint accounts or transferred them into individual ownership, you still need to break the connection between your credit reports.

Contact the three big credit rating agencies to ask for a financial dissolution so you won’t be affected by your ex-partner’s borrowing habits.

Don’t panic

Even if you’re financially responsible, sometimes life events mean you will struggle to make a payment or will miss a direct debit. You can add a note on to your credit report to explain why your score is low but you’ll need to contact all three ratings agencies.

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It is called a notice of correction and can be up to 200 words long, allowing you to give context such as falling behind on your payments because of redundancy or illness.

This won’t boost your score but it does mean banks won’t automatically decline your credit application. Instead, they will manually assess it – which may make the process longer – and consider whether to offer you a loan taking that context into consideration.

You can remove the notice of correction at any time if you find you no longer need it.

How to improve your credit score (2024)

FAQs

What is the fastest way to raise your credit score? ›

  1. Pay credit card balances strategically.
  2. Ask for higher credit limits.
  3. Become an authorized user.
  4. Pay bills on time.
  5. Dispute credit report errors.
  6. Deal with collections accounts.
  7. Use a secured credit card.
  8. Get credit for rent and utility payments.
Mar 26, 2024

How can I improve my credit score in 30 days? ›

Steps you can take to raise your credit score quickly include:
  1. Lower your credit utilization rate.
  2. Ask for late payment forgiveness.
  3. Dispute inaccurate information on your credit reports.
  4. Add utility and phone payments to your credit report.
  5. Check and understand your credit score.
  6. The bottom line about building credit fast.

What is the fastest way to fix your credit score? ›

If you want to improve your credit quickly, the following strategies could help:
  1. Use a reputable credit repair service.
  2. Prioritize and pay outstanding debt.
  3. Explore secured credit cards.
  4. Become an authorized user.
  5. Develop a budget and stick to it.
Feb 27, 2024

How to get a 720 credit score in 6 months? ›

How do I get a 720 credit score in 6 months?
  1. Review your credit report to dispute errors and identify areas for improvement.
  2. Make all payments on time and avoid applying for new credit.
  3. Lower your utilization ratio by paying down balances, increasing credit limits, or consolidating your debt.
Jan 18, 2024

Is a credit score of 580 bad? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

How to raise your credit score 200 points in 30 days? ›

How to Raise your Credit Score by 200 Points in 30 Days?
  1. Be a Responsible Payer. ...
  2. Limit your Loan and Credit Card Applications. ...
  3. Lower your Credit Utilisation Rate. ...
  4. Raise Dispute for Inaccuracies in your Credit Report. ...
  5. Do not Close Old Accounts.
Aug 1, 2022

Is A 650 A Good credit score? ›

As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.

How long does it take to build credit from 500 to 700? ›

It depends on your starting point. Generally, significant improvement can happen within a few months with dedicated effort (like paying down debt). Reaching 700 itself might take longer (12-24 months), depending on your credit history. Consistency is key!

How long does credit score take to improve? ›

Remember, building credit takes time and credit scoring models are based on your activity and account history over time. Simply put, one month of positive on-time payment history is great, but six to 12 months of positive payment history is better and will have a greater impact.

Why is my credit score going down when I pay on time? ›

It's possible that you could see your credit scores drop after fulfilling your payment obligations on a loan or credit card debt. Paying off debt might lower your credit scores if removing the debt affects certain factors like your credit mix, the length of your credit history or your credit utilization ratio.

What is a good credit score for my age? ›

FICO Average Credit Score by Age Bracket and Year, 2022
Age Bracket2022
18–25679 (Good)
26–41687 (Good)
42–57706 (Good)
58–76742 (Very Good)
1 more row

What's a good credit score to get a car? ›

A target credit score of 661 or above should get you a new-car loan with an annual percentage rate of around 7.01% or better, or a used-car loan around 9.73% or lower. Superprime: 781-850.

How rare is a 720 credit score? ›

Plus, you're likely to get approved for lower interest rates, which can save you money in the long run. According to the latest credit score statistics, the average FICO score is 716, so a 720 is slightly above average. 67% of Americans have a score in this range or higher based on data from Experian®.

What credit score is needed to buy a house? ›

For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.

Should I pay off my credit card in full or leave a small balance? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

How to get a 700 credit score in 30 days? ›

WalletHub, Financial Company. There are several ways to raise your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your credit score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit.

How fast can you raise your credit score from 500 to 700? ›

The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.

How can I raise my credit score 100 points overnight? ›

10 Ways to Boost Your Credit Score
  1. Review Your Credit Report. ...
  2. Pay Your Bills on Time. ...
  3. Ask for Late Payment Forgiveness. ...
  4. Keep Credit Card Balances Low. ...
  5. Keep Old Credit Cards Active. ...
  6. Become an Authorized User. ...
  7. Consider a Credit Builder Loan. ...
  8. Take Out a Secured Credit Card.

How can I raise my credit score 70 points fast? ›

To raise your credit score by 70 points, you can dispute errors on your credit report, catch up on late payments, pay down debt, and lower your credit utilization.

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