How to improve your credit score

What is a credit score?

A credit score is calculated based on information on your credit report and shows lenders how likely you are to be accepted for credit. There is no universal credit score as all lenders will use their own criteria based on information held on your credit file. A credit score is likely to be taken into consideration on many different occasions, from applying for a mortgage, a loan or a credit card to things like taking out a mobile phone contract. Having a good credit score will help determine if you will be accepted for credit and the rate that you are offered.

What does my credit report include?

A credit report is a historical record of how and when you pay your bills. Your credit report includes information such as your current borrowing, your current credit limits and whether you make payments on time.

How can I see my credit score?

You can see your credit report by searching credit reference agencies online. These agencies are more commonly known as CRAs and you should contact them directly to obtain a copy of your report. The most well-known CRAs are Experian, Equifax and TransUnion. A credit report is free from CRAs but other subscription options, which may provide an indicative score, are available through CRAs and other organisations.

It is also good practice to check all details held on your report are accurate. If you find any details that may not be correct, don’t worry, these can be corrected.

How can I improve my credit score?

Avoid a payment break

Taking a payment break, a ‘payment holiday’ or any other pre-arranged payment breaks might affect your credit score, although it is advisable to talk to your creditor or lender as soon as you begin to struggle making the repayments.

Register on the electoral roll

Registering will establish your identity to lenders as well as demonstrating your stability. Having registered in order to vote is a great way to boost your credit score and only takes minutes to register.

Keep applications to a minimum

If you have been declined for credit, do not reapply straight away. Instead, check your credit report file to see if something is on there that shouldn’t be.

Consider any past or current financial links you have with a partner

If your partner has a poor credit history, this may be linked to you through utility bills, bank accounts or your mortgage. To avoid this, try to separate your credit accounts and bills.

Keep track of your credit history

A credit history is a record of a borrowers responsible repayments of debt. Ensure that your credit report file is up to date. This can be checked through credit reference agencies such as Experian.

Make sure you pay bills on time

One of best way to maintain a strong credit profile is to stick to your commitments and make payments on time. There are other ways to improve you credit score which can be simple, but effective.

How long does it take for my credit score to improve?

It is possible to improve your credit score by a few points within a few weeks, but this is not guaranteed. To have significant credit improvement normally can take anywhere from a few months to a few years.