Improving your credit score is essential for anyone looking for a better chance of approval for credit cards, loans, and mortgages, plus access to lower interest rates and higher borrowing limits. While building a strong credit profile relies on consistent financial habits, there are several steps you can take to see an immediate boost.
Registering to vote, paying bills on time, and keeping credit utilisation low are just some of the ways to repair your score. Kara Gammell, Personal Finance Expert at MoneySuperMarket, shares her insights to help you improve your financial situation.
Register to Vote
This is one of the simplest and fastest ways to improve your credit score. Being on the electoral roll immediately boosts your profile because lenders use it to verify your identity and address. You can register online through Gov.uk.
Pay Bills on Time
Your payment history is one of the most important factors affecting your credit score. Consistently making payments on time demonstrates responsible credit management and can help improve your score over time. Consider setting up automatic payments or direct debits to avoid missing due dates. If you have recently missed a payment, bringing the account current as soon as possible can minimise the negative impact. Kara says: "Late or missing payments make you look unreliable, and lenders perceive you as a higher risk. Setting up direct debits is the best way to make sure you never miss a due date."
Keep Credit Utilisation Low
Credit utilisation is the percentage of your total available credit limit that you are currently using. To improve your score quickly, pay off your credit card balances in full each month, or at least keep your balances well below 30% of your limit. Paying off your balance before your statement closing date can instantly lower the utilisation reported to agencies.
Check Your Credit Report for Errors
Errors on your credit report can unfairly lower your credit score. It is important to review your credit reports regularly and look for inaccuracies such as incorrect late payments, accounts that do not belong to you, duplicate debts, or incorrect account balances. If you identify any mistakes, dispute them with the relevant credit bureau. Correcting errors can sometimes result in a noticeable improvement to your score.
Avoid Applying for Multiple New Credit Accounts
Every new credit application may result in a hard inquiry on your credit report, which can temporarily reduce your score. If you are planning to apply for a mortgage, loan, or other significant form of credit, it is wise to avoid unnecessary credit applications. Limiting new credit inquiries can help maintain and improve your score.
Keep Older Credit Accounts Open
The length of your credit history is another factor that influences your credit score. Closing older accounts can shorten your average credit history and potentially lower your score. If your older credit cards do not charge annual fees, keeping them open can help strengthen your credit profile and support a higher score over time. "A longer credit history can work in your favour, so closing long-held accounts might reduce the strength of your credit profile," Kara explains.
