How to improve your credit score quickly
Need to bump up a poor rating? Here’s 12 quickfire steps to help you on your way
If your finances took a bit of a battering due to Covid – perhaps due to a drop in income or a change in circumstances – your credit score might not be up to scratch.
A poor credit rating can have a big impact on your ability to borrow, as lenders will view you as financially unreliable. This could mean you miss out on the best deals on products such as credit cards, loans, mortgages or mobile phone contracts. In some cases, it could mean you getting rejected altogether.
If your score is currently a bit below par, all is not lost, as it is not fixed.
While improving your rating can involve implementing lots of different changes over a long period of time, there are also some quick things you can do which will have a positive impact.
Here are 12 speedy steps you can take to boost your score.
1. Check for errors on your credit report
Check your credit file to ensure all the information held on it is accurate and up-to-date. You can do this quickly and simply with our Credit Monitor tool. If you see any errors, contact the credit reference agency to get these corrected. If there’s a valid reason why you missed a payment, get a ‘notice of correction’ added to explain why this happened.
2. Keep checking regularly
Once you’ve checked your report, you can’t just forget about it. You need to keep coming back to it at regular intervals to ensure the information held reflects the facts. Get into good habits with your credit-file checking.
3. Get registered on the electoral register
This will only take a few minutes but can add lots of points to your rating. Lenders use this to confirm your identity and that you live where you say you do. Lenders will also view you being registered to vote as a sign of stability and reliability.
4. Make credit card repayments on time
It’s important to never miss a card repayment as this could leave a blemish on your file. Marks left by missed or late payments can remain on your record for six years. Set up a direct debit to ensure your monthly repayments go out on time. Better still, repay your card in full each month when it’s due.
5. Pay all bills on time
While you’re at it, set up direct debits for all your regular payments, such as gas, electricity, water, broadband, council tax, mobile phone, rent, mortgage, loans and so on. This will help ensure you never forget a payment.
6. Close any credit cards you’re not using
Having open but unused credit accounts can work against you, so shut down any that you do not need.
7. Don’t max out on your available credit
Aim to keep your credit card balances below 25% of the available credit limit. This means, for example, if you have a £2,000 limit, it’s best not to have more than £500 in debt. This will demonstrate to a lender that you’re not too heavily reliant on credit.
8. Don’t withdraw cash with your credit card
While it might seem convenient to take cash from an ATM with your plastic, avoid doing this, as this could harm your score.
9. Try to steer clear of your overdraft
Never exceed your overdraft limit. And if you can, try to avoid using your overdraft at all.
10. Reduce your borrowing
Try and bring down the amount you owe on credit cards and other debts, such as loans.
11. Sever outdated ties to other people
If you’re no longer with a partner that you used to have a joint bank account or loan with, get a ‘notice of disassociation’ added to your file. Taking out joint credit links the two of you together in the eyes of lenders, so you need to get this financial association removed. This will ensure their credit score does not harm your rating.
12. Show some stability
Don’t move home or start a new job just prior to applying for credit. The longer you stay at one address – or in one job – the better your chance of getting accepted for credit.
Remember that while all these quickfire actions are steps in the right direction, your credit score isn’t going to suddenly improve overnight.
That said, with the right action, you should start to see your score get healthier over time.