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How to improve your credit score with a credit card

Looking to improve your credit score but not sure where to start? This guide shows how finding the right credit card can help increase your credit rating...

published: 02 July 2021
Read time: 5 minutes

If you’re a young person who's never borrowed before, or you have a poor credit history and want to improve it, finding the right credit card can be a step towards improving your score. With a strong credit rating lenders will be more likely to accept you for borrowing in the future. 

Building a credit history

A credit card lets you borrow money to pay for goods and services and pay the money back at a later date - with interest added. But why is building a credit history so important? After all, if you have no history of bad credit or debt problems, you’ll find it easy to get a credit card, right? In reality, if you have little to no credit history, lenders won’t have the evidence to see you can manage credit well so they’re likely to be reluctant to offer you a credit card.

You may be wondering why having a credit score is important, especially if you’re hesitant to borrow money. A credit score is your way of showing lenders you’re responsible with money. It is proof you can borrow and repay in good time – which should usually improve your chances of being accepted for a loan or mortgage in the future. Finding the right credit card can help you to build a strong credit score, whether you use balance transfer credit cards or credit cards for bad credit.

Lady using a credit card

How can I improve my credit score with a credit card?

If you have bad credit and have struggled with debt in the past, a credit builder card can help improve your credit score. With a credit builder card, the lender will give you a low credit limit which you can use to make small purchases. As long as you pay off the balance at the end of each month, you’ll begin to demonstrate responsible borrowing and your credit score should improve over time. Make sure you meet your repayments each month in full and on time, to prove you can pay back the money you borrow.

Alternatively, a balance transfer card allows you to transfer an existing credit balance onto a new card, often with a lower or 0% interest rate. This can help you manage your debt and pay less interest for a period of time to get your finances back on track.

Never had credit before? Getting your first credit card can help build up your credit score by showing the lender you can responsibly use credit and pay it back.

What to consider and things to avoid

There are some things you need to watch out for when using a credit card, including: 

  • Missing payments: A late or missed payment can impact both your credit rating and push up the interest rate on your card - meaning you’ll owe more in interest and late fees 

  • Only making minimum payments: If you only make the minimum payment each month, interest will start to be added to your card balance and the debt can grow quickly

  • Over-spending: Use your card too often and it can lead to a big card balance which could affect your credit score. You run the risk of it growing into a debt problem. The larger your balance the harder and more expensive it could be to pay off

How long will it take my credit score to improve?

With the right action you should start to see your credit score improve over time. But it may take a while for it to be built up. As you meet your repayments on time, your credit rating should rise. You can keep an eye on your credit report and score for free with tips on how to improve it with Credit Monitor.

A recent consumer survey of Generation Z by MoneySuperMarket found that 35% of young people had checked their credit score online as a way of keeping on top of their credit rating and taking steps to improve it.

Consider quick wins that could improve your credit score, such as registering on the electoral roll, paying your bills on time and checking for fraudulent activity. These are all simple steps that could help you nurture your credit rating.

What if I’ve been rejected for a card in the past?

Being rejected for a credit card may leave you feeling disheartened, but it doesn’t mean a permanent ‘no’ to borrowing. The thing to be wary of is too many 'hard' credit checks over a short period of time can negatively impact your credit score for a few months. This can limit the likelihood of you being approved for credit in the future.

But this is where we can help. When you compare credit cards through MoneySuperMarket we’ll only carry out a 'soft' search on you to check whether you’re eligible - so it won’t negatively impact your credit score. Then you can see which cards you're likely to be accepted for before you apply, reducing the risk of another rejection.

Other ways to improve your credit score

There are several ways you can improve your credit score, to open the door to better deals on credit cards and loans, including: 

Check any linked accounts: Find out if your credit score is linked to your spouse or family member through a joint account you have with them – if they have a poor credit score, this may affect yours

Register to vote: You’ll find it harder to get credit if your name isn’t on the electoral roll. You can register on the GOV.UK website

Paying bills on time: Keeping up with your household bill payments, including your phone contract, can prove to lenders you’re keeping your finances in check

Check for errors: Have you recently moved house or tied the knot and changed your surname? Remember to update your credit report

Existing debt: You should try to pay off any existing debt before applying for new credit. Lenders may hesitate to lend you more money if you already have a high level of debt

How do I monitor my credit score once I have a card?

There’s a few ways you can monitor your credit score. Credit reference agencies like TransUnion and Equifax will have a record of your credit rating which you can get a copy of your credit file for free.

Why not keep an eye on your credit score with Credit Monitor? You can get a free copy of your file and see your score, plus you’ll get free tips and tricks on how to improve your score and see where you're acing it already!

More on credit cards

Want to discover more about choosing the right credit card for you? You may find these guides helpful:

How to compare credit cards with MoneySuperMarket

Finding the right credit card is easy when you compare with MoneySuperMarket. First, you’ll need to tell us a little about yourself and your financial situation, including information on your employment, income and what you’ll be using your new credit card for.

From there, you’ll receive a list of credit cards that match your needs. We’ll even show you which cards you’re most likely to be accepted for if you apply with our credit card eligibility checker. This way you reduce the risk of being rejected and keep your credit rating in good shape.

Once you’ve found the card you want, just click through to the provider to finalise your application. Once you’re accepted for a card deal you’ll be told your credit limit and interest rate. As soon as your card arrives in the post you just need to activate it – then it will be ready to use.

MoneySuperMarket is a credit broker not a lender. You must be 18 or over and a UK resident.

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