How to improve your credit score

Building a good credit score, also known as a credit rating, can affect your ability to borrow money or get products such as credit cards. You can check your score for free – and if it’s not great, you can improve it.

What is a credit score?

Your credit score is created from information held in your credit report, also known as your credit file.

Your credit score can differ between lenders or even between different products from the same lender. It depends on the criteria used in assessing you as a potential customer.

The information held on your credit file and your credit application form might be used to decide:

  • whether to lend to you
  • how much to let you borrow
  • how much interest to charge you.

The most recent information on your file will have the most impact. This is because lenders will be most interested in your current financial situation. That said, your financial decisions - good or bad - from the last six years will still be on record.

If your credit report shows a few missed payments, you might be charged higher interest by lenders, or you might not be eligible for some loans.

This is because lenders believe they might be taking a higher risk when lending to you.

Your credit history can affect your ability to get things like insurance or begin mobile phone contracts.

It’s a good idea to check your report often – as it can help you spot any fraudulent activity or mistakes on it.

How do I check my credit score?

There are three main credit scoring agencies in the UK - Equifax, Experian and TransUnion.

They all hold information on you, which lenders use. Even small errors can cause problems, so it’s important you check through your credit report. It’s best to check each of them at least once a year.

The credit scoring agencies offer free access to your full credit report and score. These are available through their partner websites:

Credit scoring agency Access your credit file and credit score with
Equifax ClearScore
Experian MSEs Credit club
TransUnion Credit Karma

If you’d prefer a paper copy of your credit report, you can contact the credit scoring agencies direct:

For more information, see our How to check your credit report guide.

Credit score membership

If you sign up to a subscription membership with one of the main credit agencies you might be able to get more up-to-date information on your credit history.

Some of the memberships might also give you access to companies that can look into your file.

But remember to set up a reminder to cancel your membership if you’re on a free trial – as you don’t want to pay the monthly subscription when it ends.

What is a good credit score?

Different lenders have their own standards for rating credit scores.

However, if you have a good score with one of the main credit reporting agencies, it’s more than likely you’ll have a good credit score with your lender.

A good credit score with:

  • TransUnion is 781 out of 850
  • Equifax is over 420 out of 700
  • Experian is over 880 out of 999.

But be aware that your credit score doesn’t guarantee that you’ll be approved for credit or offered the lowest interest rates.

This is because a lender’s decision is not made solely on the score.

So, if you’re looking for a card or loan and are worried you might be rejected, it’s a good place to start your search.

How long will it take to improve my credit score?

In general, credit history is built up slowly over time as you increase the number of on-time payments you make.

The longer the bill goes unpaid, the more likely it is to affect your credit score. Keep a close eye on your credit score to help you spot issues.

Most negative marks will remain on your file for at least six years. After that, everything is deleted from your file. This includes missed payments, defaults, bankruptcy and CCJs.

However, there are some quick improvements that you can make to begin improving your credit score.

How can I improve my credit score?

If you have a low credit rating, there are several things you can do to improve it:

  • Register on the electoral roll. If your name’s not on there, you’ll find it much harder to get credit. Go to the GOV.UK website to find out how register to vote online or by post.
  • Check for mistakes on your file. Even having just a slightly wrong address can affect your score. So make sure you check all the details and report any incorrect information straight away.
  • Pay your bills on time. Paying a phone landline or internet contract on time is a great way to prove to lenders that you can manage your finances.
  • Check if you’re linked to another person. Having a spouse, friend or family member’s credit rating linked to yours through a joint account could affect your personal rating if they have a poor score.
  • Check for fraudulent activity. If something on your credit report is wrong or doesn’t apply to you, contact the credit reference agency to have your file updated. For example, if someone applied for credit in your name without your knowledge.
  • County Court Judgements (CCJs). Receiving any county court judgements for debt will seriously affect your credit score. If you’re having problems keeping up with payments, find free debt advice online.
  • High levels of existing debt. Ideally, you should pay off any outstanding debt before applying for new credit. This is because banks, building societies and credit card companies might be hesitant about lending you more if you already have a lot of debt.
  • Moving home a lot. Lenders feel more comfortable if they see that you’ve lived at one address for a considerable period.
  • Keep your credit utilisation low. Your credit utilisation is how much of your available credit limit you use. For example, if you have a credit limit of £2,000 and you’ve used £1,000 of that, your credit utilisation is 50%, so you’re using half of your credit limit. Usually, using less of your available credit will be seen positively by lenders, and will increase your credit score. If possible, try to keep your credit utilisation at 25% or lower.

If you’re struggling to improve your score, it might be worth signing up to a one-month free trial membership offered by the main credit agencies.

What information is in a credit report?

Each agency holds slightly different information about you. So it’s worth checking all three for a more accurate picture.

In general, your file will include:

  • your name, address and date of birth
  • some search footprints on your file, such as credit applications
  • financial links to other people, for example a joint loan or bank account
  • any late/missed payments or defaults
  • how much money you owe to lenders
  • any County Court Judgments (CCJs) against you that weren’t paid in full within one month of receiving the notice
  • if you’re on the electoral register at your current address
  • if you’ve been declared bankrupt or entered an IVA (Individual Voluntary Arrangement).

It won’t include:

  • your salary
  • student loans
  • medical history
  • criminal record
  • council tax arrears
  • parking or driving fines.

However, you might be asked for this information when applying for a loan or contract.

They might then choose to use this information alongside your credit report to assess you.

Consider getting a credit-builder card

If you have a poor credit history, you might want to consider a credit-builder credit card.

These are designed for people with little, or a bad, credit history. The credit limits are often low and the interest rates high. This reflects the level of trust your credit file gives lenders.

By using these cards and paying off the bills each month, you can prove you’re creditworthy. This will increase your credit score. When your credit rating improves, you can apply for other cards and loans.

Be aware that the interest rates charged are much higher than standard credit cards though.

Typically, you’ll be paying over 30% in interest a year. This is another reason to try to pay off any balance in full each month.

Otherwise, you might end up in debt that you struggle to get out of. And this could harm your credit rating more.

Avoid expensive credit repair companies

You might see adverts from firms that claim to repair your credit rating.

Most simply advise you on how to see your credit file and improve your credit rating. But you don’t need to pay for that – you can do it yourself.

Some might claim that they can do things that – legally – they can’t. Or they encourage you to lie to the credit reference agencies.

It’s best not to even consider using these firms.

How to report and fix any mistakes on your file

If you do spot any mistakes, report them to the credit reference agency.

The agency has 28 days to remove the information or tell you why they don’t agree with you.

During that time, the ‘mistake’ will be marked as ‘disputed’. And lenders aren’t allowed to rely on it when assessing your credit rating.

It’s also best to speak to the credit provider you believe is responsible for the incorrect entry.

Credit reference agencies rely on information provided by lenders. And often the lender is in the best position to resolve this.

If there’s information on your file that’s accurate but doesn’t reflect your current situation, for example you got into debt problems when you lost your job but you’re back in work now, you can add a ‘notice of correction’ to your credit report.

This is a statement of up to 200 words about what happened.

Find out more about correcting personal information on your file on the Information Commissioner’s Office website.

Recovering from credit fraud

If you’ve been a victim of identity impersonation or credit fraud, your credit score might have taken a hit.

To improve your credit score after you’ve been a victim means, follow our steps in ‘How can I improve my credit rating and credit score?’ described above.

When you check your credit file, keep an eye out for a Cifas marker called a ‘Victim of impersonation’ notice. Having this on your file warns future lenders that you’ve been a victim, or are vulnerable to becoming a victim, of fraud.

A Cifas marker is put on your file by a lender who felt there had been an attempt at fraud using your identity. They are legally obliged to report this.

The marker will stay on your file for 13 months.

Having this marker doesn’t affect your credit score and doesn’t stop you from taking out credit. It may, however, cause you to have some issues if you’re applying for credit that is processed automatically, like store finance

This is because your file would need to be reviewed and checked manually.

Find out more about these markers on the Cifas websiteopens in new window.

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