The steps you can take to increase your credit rating
Lenders look at your credit score to see how reliable you’ve been with credit in the past. Our guide coves how to build and improve your score – so you’ll have access to a wider range of cards, loans and mortgages
Key takeaways
Knowing your credit score allows you to understand how lenders might view any applications you make for a new credit card, loan or mortgage
Paying debts, household bills and other credit accounts on time will improve your credit score
Registering on the electoral roll will improve your credit score as it makes it easier for lenders to check your identity
Being financially linked to someone with bad credit can harm your creditworthiness
Why is a good credit score important?
A good credit score is important because it plays a key role in your ability to borrow money such as personal loans, credit cards, mortgages, and car finance.
Lenders, such as banks and credit card providers, use your credit score to assess how likely you are to repay what you borrow. A higher score can improve your chances of being approved for loans, mortgages, or credit cards.
A good credit score can also give you access to a wider range of products, lower interest rates and APRs and a higher credit limit, so you can borrow more money at better rates if you need to in the future.
This can save you a significant amount of money over time, especially on large financial commitments like a mortgage or car finance.
Mobile phone contracts, setting up utility accounts, and rental agreements may involve a credit check, and a strong score can reduce or eliminate the need for upfront deposits.
How can I check my credit score?
If you’re after quick access to your credit score, MoneySupermarket’s Credit Score will show you your credit score, and offers handy tips on how to improve it – all for free. You can also see what you’re doing right when it comes to managing your cash – and how that impacts your score.
Aside from Credit Score, you can ask for a copy of your credit file for free from one of the three main credit reference agencies in the UK: Experian, Equifax and TransUnion.
How can I improve my credit score?
To improve your credit score, make sure you pay all bills and credit commitments on time. Ensure your personal details, including your address, are up to date and that you're registered on the electoral roll.
Here are some ways you can improve your credit score:
Get on the electoral roll
Being on the electoral register at your current address helps prove your identity and is checked by lenders as part of your credit score. This is a small step that can give your credit rating a boost.
Show stability
You could improve your credit score by not moving house too often – lenders like stability. If you do move house, remember to register to vote again.
Check your credit report accuracy
Your credit report holds details on your financial history, including whether your accounts have been settled or if you have missed payments. Sometimes this information can be incorrect, so check your credit report for its accuracy.
If something seems to be missing or there are errors, contact the provider to correct them. Similarly, you can add a ‘notice of correction’ which allows you to explain why a payment was missed.
Pay your bills on time
A missed payment can leave a mark on your file that could negatively affect your credit rating . That’s why it’s important to pay your bills on time and set up direct debits so you don’t miss anything.
Build your credit history
If you’ve never borrowed money before, there won’t be any evidence that you’re a responsible borrower who can pay money back in good time. So, if you’ve just turned 18 or just moved to the UK, you will probably have a low credit score.
A good way to build a credit history is with a credit builder card. These cards often have higher interest rates, so make sure you pay off the balance in full each month.
Get a pay monthly mobile phone
Taking out a pay monthly mobile phone contract can help improve your credit score if you manage it responsibly. Each monthly payment is a form of credit agreement, and making those payments on time shows lenders that you’re reliable with your financial commitments.
Pay for car insurance monthly
Paying for car insurance monthly can help improve your credit score because it’s treated like a credit agreement.
When you choose to pay in instalments, the insurer typically uses a third-party finance provider to cover the full annual cost upfront, and you repay it in monthly amounts plus interest. These regular payments are reported to credit reference agencies (CRAs), so making them on time helps build a positive payment history.
Don’t use all available credit
How much of your total available credit you owe is known as your credit utilisation. For example, if you have a £2,000 credit card limit and owe £500, your credit utilisation ratio is 25%.
If you keep your credit utilisation relatively low, potential lenders will view you as managing your finances responsibly.
Close unused credit card accounts
If you’ve held several credit cards over the years, you may find some of them aren’t used anymore. If that’s the case, it’s best to close those unused accounts.
You'll then lower the total amount of credit available to you. A large overall credit limit, even if unused, can be seen negatively by some lenders.
Use an eligibility checker
Using an eligibility checker before applying for credit can significantly reduce your risk of being rejected because it performs a soft credit search that doesn’t affect your credit score.
These checkers assess your chances of approval based on your credit profile and the lender’s criteria, helping you identify products you’re more likely to qualify for.
How can I correct errors in my credit report?
Mistakes can happen on credit reports which can affect your credit score. Here are some ways you can correct errors on your credit report:
Tell the lender
If you spot a mistake, let the relevant bank or card provider know. It might amend it straightaway, or you may need to go through its official complaints' procedure. The bank or lender will also update all the credit reference agencies it uses, so you won’t have to submit more than one request.
Contact the credit scoring agency
There are three main credit reference agencies in the UK: Experian, Equifax and TransUnion. They all have online forms where you can notify them of any mistakes on your file and ask for corrections.
Add a notice of correction
If you can’t get an error fixed, you can add a ‘notice of correction’ to your credit file. This gives you up to 200 words to explain what happened and why you shouldn’t be judged for it. For example, if you missed a payment because of a period of ill health.
How can I improve my credit score when I have CCJs?
If you have a county court judgement (CCJ) against you, your credit score will be affected. To improve your credit score, you should try and clear what you owe as quickly as possible. Even though CCJs remain on your file for six years, they will be marked as settled when you pay them off.
The court should update the credit reference agencies when you pay, so check your credit report to see if they are marked correctly. If there is a mistake and you need proof of payment, you may have to apply to the court for a ‘certificate of satisfaction’. You have to pay a fee for this but doing so will improve your credit rating.
Does having a credit card improve my credit score?
Having a credit card can improve your credit score if used responsibly. Using a credit card and paying the money back in good time will show lenders that you can handle credit. Make sure you clear the balance every month so you don’t face interest charges – it may be a good idea to set up a direct debit for either the minimum payment, a set amount, or the whole balance each month.
If you’re looking to build your credit score through taking out a credit card, then a credit builder card may suit you. These cards have lower eligibility criteria than mainstream credit cards. Credit builder credit cards typically come with higher interest rates and lower borrowing limits, but when used properly they can help evidence responsible credit use and should improve your credit score.
How long does it take to improve my credit score?
Improving a poor credit score can take a few months to over a year, depending on your financial situation and the actions you take.
💡 Top tip: First time buyers, in particular, should try to improve their credit score before applying for a mortgage. The same goes if you are planning to remortgage.
With the right steps, like meeting your repayments, registering on the electoral roll and checking your credit report for errors, you should see improvements to your credit rating. You can keep an eye on your credit score, with quick tips on how to improve it with credit score.
📣 Did you know? 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.
While missed payments and exceeding credit limits can stay on your file for up to six years, developing good financial habits is the best way to improve your credit score over time.
How often should I check my credit score?
You should check your credit score at least once a month, especially if you’re planning to apply for credit, such as a loan, mortgage, or credit card.
You may also want to check it a short time after making any new credit applications or taking any measures to improve your credit score, like closing old accounts or registering on the electoral roll.
Regular checks help you spot errors, track improvements, and catch any signs of fraud or identity theft early. Many services, like MoneySuperMarket’s Credit Monitor, offer free monthly updates without affecting your score, making it easy to stay informed and in control of your financial health.
What will have a negative impact on my credit score?
Here are some things that will bring your credit rating down:
Missing payments: You build credit by making your payments on time, if you have a history of late payments or not making them at all this will hurt your credit score.
Overdraft: Your account goes into overdraft when your current account balance is below zero. Your arranged overdraft is when you’ve agreed with your bank a maximum amount you can owe. An unarranged overdraft is when you haven’t agreed an overdraft with your bank, but have spent more money than the amount in your account. Going into your unarranged overdraft may be reported on your credit report and can lower your score.
Financial associations: If you’re financially linked with anyone who has bad credit this can harm your credit rating. Examples of financial associations are joint mortgages and a joint bank account.
Not paying off credit cards: Paying your credit cards off in full will help you avoid interest charges, clear debt faster and boost your credit score.
Court action: If you have a County Court Judgment or been declared bankrupt this can negatively impact your credit rating.
Many credit applications in a short space of time: Every time you apply for credit, you’ll undergo a hard credit check which will leave a mark on your credit file. It’s good practice to space out credit applications to minimise any damage to your score.
📌 If you're worried about money and it’s affecting your mental health, visit our Money Talks hub for guides and support.
Author
Ella Jukwey
Former Content Writer
Reviewer
Emma Lunn
Personal finance expert
Emma has written about personal finance for almost 20 years, with a career spanning several recessions and their inevitable consequences. Emma’s main focus is helping people learn to manage their...
