How to improve your credit score: 12 easy hacks

How to improve your credit score quickly uk

March 31, 2021

Your credit score is a valuable asset – if you’ve ever considered getting a loan, credit cardmortgage or anything requiring a credit contract you’ll know how important a factor it is to get the best deals, or even get accepted for credit at all.

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Lenders use your credit score and report to determine how creditworthy you are and to decide whether or not to lend to you.

Simply put, the better your credit score, the more likely you are to get credit fast with much lower rates compared to someone applying with a low credit score (in which case, the applicant may get rejected for credit or may be offered a deal with a high interest rate).

So what exactly is a credit score, how does it work and how can you improve yours quickly? In this guide, we give you 12 tips for increasing your credit score and answer some frequently asked questions.

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What is a credit score?

A credit score (or credit rating) is a three-digit number that is calculated by a mathematical algorithm based on a number of factors in your credit report (history) and then assigned to you. It can fluctuate depending on your financial activity.

Important factors that can affect your credit rating include:

  • Your payment history – Payments you have made (or haven’t made) in the past and late payments.
  • Your total debt – How much money you already owe on other accounts and how much of your credit limits you are utilising (how close you are to your limits on credit cards, for example).
  • Age of debt – How long your credit history is, i.e. when you first acquired credit. A longer credit history is preferable to most lenders, as it shows that you have been reliable in paying off your debts in full and on time and there is more data available for analysis.
  • Type of credit – Do you have multiple loans, credit cards and a phone contract? Lenders will use this information to determine how much of a risk you present.
  • New credit – Have you recently applied to lots of different lenders? You must be careful when applying for credit because if you get rejected, this will show up on your report, so be sure to check your eligibility first. Also, applying for too much credit at once will make you seem like you are desperate to borrow, which is also a warning sign to lenders.

The credit score was designed to help lenders manage the risks they are taking, helping them predict the chances of you repaying (or not repaying) the debt.

Whilst your score is important, how successful you will be with individual lenders is also dependent on their own criteria for lending. Lending decisions can not be influenced by age, race, gender, marital status, address and income, and these factors do not affect your credit score.

You might like: Creditworthiness explained - What do lenders look at?

It's worth bearing in mind that your credit score isn’t just important when applying for loans or credit cards – employers, landlords and utilities companies may also take your credit score into account.

Why is my credit score going down?

If you’ve noticed that your credit score has gone down, which can be disheartening if you feel like you manage your credit well. There are a number of reasons why a credit score may decrease, here are a few:

  • You’ve missed a credit repaymentDgsdg (known as a payment default).
  • You have recently applied for credit, such as a loan or mortgage (if you previously had a good credit score, it may improve again quickly after a temporary drop due to applying for credit).
  • You have used up all of your credit limit on your credit card (or your credit limit has been decreased by your lender)
  • There is wrong information on your credit report (visit Checkmyfile to see your credit reports created by all four main credit reference agencies (CRAs) in the UK - this will help you spot any errors that need rectifying)

Learn more in our guide: Why has my credit score gone down?

How to improve your credit score (UK) - 12 hacks

Now that you know what your credit score is and the impact it can have on borrowing money, here are some tips on how to improve yours as fast as possible:

1. Make your repayments on time and in full

If you’re planning on taking out credit or you have already got a credit card, loan or mortgage, it is crucial that you keep up-to-date with your repayments as missing them can really hurt your credit score.

By making your monthly payments on time and in full, this will show up on your report, so when potential lenders check this, they will have a good, positive view of your financial history. They will therefore be more inclined to lend you money and offer you a good deal.

2. Never utilise more than 25-30% of your credit if you can help it

Credit utilisation is really important to lenders. If you look like you’re struggling financially and very dependent on credit, it will not look appealing to potential lenders.

To avoid this, try your best to keep your credit utilisation as low as you possibly can, i.e. try not to use too much of your credit limit (less than 30%) and ensure you use your credit card little and often. This will all help to show that you are a sensible borrower and manage your money responsibly, without things getting out of hand.

3. Think carefully before closing accounts that you no longer use

Think carefully before closing any unused accounts as it could have an impact on your score. If you haven’t used one of your cards in a while then it may well work out beneficial to cancel it as it lowers the chances of fraudulent activity.

However, if you cancel a credit card, it may then increase your credit utilisation, which can affect your score.

Generally, it all depends on the lender who is checking your credit report and what it is they are looking for.

You may even wish to start using it again, as if you have multiple accounts that you use sensibly, this can really work in your favour.

4. Make sure you are registered on the electoral roll

If you’re not signed up already, it’s really important to make sure you register on the electoral register. This is used for identity and address verification, and it makes you look steady and reliable as lenders can easily verify who you are.

If you’re not sure whether or not you are registered, you can find out by checking your credit score as it will be stated on your report. You can find out more about registering on the GOV.UK website.

5. Check your credit report regularly and address any errors

While you may have had a good credit score previously, remember that it can always change and fluctuate over time depending on your financial activity. 

For this reason, it is always important to keep on top of your finances by regularly checking your score to stay up to date with your borrowing eligibility and also to spot any errors.

By using Checkmyfile, you can see the information that other lenders can see about you from all UK credit reference agencies (bear in mind that different lenders use different ones to check credit ratings so it’s a good idea to check them all) and you can easily identify any incorrect information. The credit checking website gives guidance on how to go about resolving any errors, which can help to improve your credit score quickly.

6. Remove any negative associations from your report

If you’re associated with any negative associates on your credit file, you should try to request that this person be removed as they may be negatively impacting your score.

A negative associate, for example, could be a partner (or an ex-partner) that you have a joint account with and whose credit score is bad. 

Read more: Does a joint bank account affect your credit score?

 7. Don't apply for too much credit in a short period of time

As previously mentioned, making too many credit applications at once can make you seem like you are struggling financially and are desperate for money, which is an immediate red flag for credit lenders.

Also, if you’re applying for too much credit and it is being rejected, this will make your credit score plummet, so always be sure that you’ve checked your eligibility, found the right deal for you and you’re 100% sure you want to apply for it before submitting any applications.

8. Where possible, use eligibility checkers for credit cards

If you’re looking to get a credit card, be sure to use an eligibility checker beforehand, like this one on Martin Lewis’s MoneySavingExpert website. This involves making a "soft search" of your credit report, which won’t impact it in any way, unlike a “hard search”.

Find out more in our guide: What is a credit check?

9. Check your score before applying for credit

As well as using an eligibility checker, it is important to check your credit score and report so that you know what the lender (or lenders) are going to see and to double-check that you don’t need to address anything (such as errors) before submitting your application.

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10. Don't withdraw cash from your credit card(s)

Not only does it cost you to withdraw cash from your credit card in most cases (due to higher interest and potential handling fees), but it will be recorded on your credit report each time you do it, which can lower your score and suggests to lenders that you’re not managing your money very well and may be experiencing money difficulties. They will therefore question whether you will be able to repay any money you owe.

11. Sign up to Experian Boost UK

As well as trying the above tips to help improve your credit score as quickly as possible, you may want to look into Experian’s latest feature - Experian Boost.

Your credit score normally increases depending on your credit applications, your utilisation, payments, county court judgements, etc. However, Experian Boost also takes into account the following:

  • Savings
  • Investments
  • Council tax payments
  • The money coming into your account as well as your outgoings
  • Payments relating to digital entertainment

By showing that you can pay these off in full and on time, your credit score will increase quickly and almost immediately in some cases. Learn more about this on the Experian website.

Another credit-building tool is Loqbox, which essentially gives you a loan to pay off within a year. When you’ve paid back each monthly payment (showing that you can manage your money well), you can transfer this amount into your bank account (£30 fee depending on the bank account).

12. Apply for a credit builder credit card

Credit building credit cards are designed to help consumers work on improving their credit score. By making your payments in time and in full, this credit card helps to bump up your score.

They are also good for people who are new to the world of credit and who don’t have a credit rating yet - a credit builder helps people without a credit score get started and helps them to build one up.

Learn more: How does a credit builder card work?

These are great tips that do work and will improve your credit score. If your credit score is low at the moment then the change will not happen overnight – but keep applying these tips and with careful management it will improve.

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

It can be difficult to say exactly how long it takes to improve your credit score in the UK, as everyone’s situation is completely different.

Generally, your credit score builds up steadily over time after taking a hit. In some cases, it can take years to build it back up, while others may find that their score increases again after 3 months.

If you miss a payment, this could stay on your report for a long time if you delay making the payment, so try and pay it off as quickly as you can. It is important to keep up-to-date with your credit score so that you’re keeping an eye on anything that may need immediate attention.

If you have anything negative recorded on your report, it could take up to 6 years to be removed (such as payment defaults, CCJs or bankruptcy), but your score could go back up in the meantime depending on how well you manage your finances.

How long does a default last?

A default (misses payment) stays on your credit report for 6 years, starting from when the default happened. Even if you repay the debt, it will, unfortunately, still stay on your record for this amount of time.

Will my credit score improve when defaults drop off?

Yes, but it could take some time - don’t expect an instant boost to your score. Once a significant amount of time has passed, you may start to see it creep back up again.

If you want to check your score and see the details shown by all credit reference agencies in the UK, tap the button below to get started (30-day free trial, easy to cancel). For further information and advice, see our related guides.

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