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How to improve your credit score

Use our 12 tips to boost your credit score and increase your chances of being accepted for credit

In this article
COVID-19 credit score update  What is a good credit score? 1. Check your credit report and correct mistakes  2. Register to vote  3. Make your rental payments count  4. Use Experian Boost to report council tax and Netflix subscriptions 5. Use 'soft searches' for new credit 6. Avoid multiple applications 7. Keep your credit usage low 
8. End financial associations with ex-partners  9. Avoid CCJs and bankruptcy 10. Pay more than the minimum 11. Never miss a repayment 12. Use a credit builder credit card How fast can you raise your credit score? Coronavirus: will payment holidays affect my credit score? Credit score FAQs Get top money-saving tips from Which?

COVID-19 credit score update 

The Financial Conduct Authority (FCA) has issued guidance on how credit reports and scores should be treated when people take agreed payment holidays on borrowing during the coronavirus pandemic.

Keep on top of the latest advice related to the COVID-19 pandemic with Which?.

 

If you've been turned down for credit or are concerned that your credit history could stop you getting a mortgage, credit card or loan, don't despair. There are steps you can take to improve your creditworthiness.

In this guide, you will find out what makes a good credit score, 12 tips to improve your credit rating and indications of how quickly changes can happen. For a round-up of the ways you can improve your credit score, watch the video below.

What is a good credit score?

There's no single, universal credit ‘rating’ or ‘score’ that a lender will use when deciding whether or not to accept you as a customer. Neither is there such a thing as a 'credit blacklist'.

The scores you may have seen advertised by credit reference agencies (CRAs), such as Experian, are simply indicators of your creditworthiness, which is based on the information held in your credit report.  

Each of the UK’s three main credit reference agencies has a scale for what it considers a 'good' or an 'excellent' credit score.

  • Equifax 420 to 466 is good; 467 to 700 is excellent
  • Experian 881 to 960 is good; 961 to 999 is excellent 
  • TransUnion 604 to 627 is good; 628 to 710 is excellent 

While it can help to have a 'good' or 'excellent' credit score, on its own, it’s not a guarantee that all lenders will extend credit to you or treat you in the same way. Each lender has its own system for deciding whether or not to lend to you - meaning you could be rejected by one, but accepted by another. 

If you have a low or ‘bad’ credit score, you'll more likely find you are turned down when you apply to borrow money and you should take steps to improve your score. Read on for 12  tips to improve your rating.

Find out more: how to check your credit score for free 

1. Check your credit report and correct mistakes 

These days, it’s worth checking your credit report at least once a month to make sure that the information it contains is correct and up to date.

With the rise in identity theft and millions of coronavirus-related payment holidays being processed, it’s a good idea to keep a frequent watch on the information being recorded in your credit report.

You should check the information each of the three main credit reference agencies (Equifax, Experian and TransUnion) have about you. You have the right to get your statutory credit report for free from these firms.

If you notice any mistakes, it's important to get them rectified as soon as possible to ensure they aren’t dragging down your credit score unnecessarily and won’t have any adverse effect on future credit applications.  

You can do this by contacting the company that provided the incorrect information or the credit reference agency itself, which will investigate on your behalf.

 

How long will it take to correct mistakes on your credit report?

 

Correcting an error can be one of the fastest ways to change your score. By law, your credit report should be accurate. Lenders and CRAs have up to 28 days to respond to a dispute, but Experian says it usually resolves issues in less than two weeks.  

2. Register to vote 

If you're not on the electoral roll, you could find it very difficult to get credit.

The electoral roll is used to confirm that you live at the address given in your application - a key part of the identity checks that lenders have to carry out.

Experian, the largest credit reference agency in the UK, says registering to vote can boost your score by as much as 50 points.

You can register to vote online at any time through the register to vote website - it only takes five minutes. 

 

How long will registering on the electoral roll take to boost your score?

 

Registering to vote can raise your score within six to eight weeks as councils send data to CRAs every month. 

3. Make your rental payments count 

Tenants sometimes pay out much more in monthly rental payments than homeowners yet still find it difficult to prove they could borrow and afford to repay loans such as a mortgage.

But now private, council and social housing tenants can get this record of making regular payments onto their credit report and improve their credit score via a rent reporting platform.

Council or social housing tenants should ask their landlord to report the rental payments they make to a free scheme called The Rental Exchange and information will appear on their Experian credit report.

Tenants renting through a private landlord or letting agent can also ask them to report rental payments to The Rental Exchange or they can choose to self-report via CreditLadder (reports to Equifax and Experian) or Canopy (reports to Experian). 

undefinedExample of how rental payments will appear on an Experian credit report. [Source: Experian]

CreditLadder and Canopy use open banking, which allows them to track the rental payments being made each month through your current account - with your permission.

If you make your rental payments on time, getting your rent on your credit report is likely to boost your Equifax or Experian credit score. 

 

How long will rent reporting take to boost your score?

 

CreditLadder’s data has been visible to lenders using Experian credit reports since October 2018 and Equifax’s since March 2020. According to Experian of the 1.2 million tenants that are currently part of the scheme, 79% would have seen a noticeable improvement in their credit score.

However, lenders might be slower to factor rent reporting into their assessments of creditworthiness. In 2018, Which? asked major lenders how they would be using rental payments data for making lending decisions and many said they hadn't incorporated the payments into their scoring yet.

4. Use Experian Boost to report council tax and Netflix subscriptions

In November 2020, Experian launched a new tool to help people quickly improve their credit scores.

Experian Boost uses open banking to allow you to grant Experian access to your current account information.

The tool allows you to unlock previously hidden information on your salary, council tax payments, savings habits and even your subscription payment information.

Experian says that 17 million people could boost their credit scores by up to 66 points by using the tool.

Find out more: Experian Boost explained

5. Use 'soft searches' for new credit

When you apply for credit a lender will perform a ‘hard credit search’ to check if you are eligible. This will leave a 'footprint' on your credit file, which will be visible to other lenders.  

So it's worth asking lenders to perform a ‘soft search' rather than a hard credit search when you're looking to get new credit. This should give you an idea of whether your application would be accepted, as well as what interest rate you'd be charged, but won't be visible to other lenders on your credit report. 

More and more lenders are offering soft searches, including on loans, credit cards and mortgages.

 

How long will this take to boost my score?

 

Using soft searches won't boost your score, but it can help protect it. By not using hard searches, your score will remain in tact while you're shopping around for a new mortgage, loan or credit card.

6. Avoid multiple applications

If you've recently been turned down for credit, it's unwise to apply for another credit card or loan immediately, as multiple applications over a short period of time may suggest to lenders that you're in financial difficulty.  

Experian says not opening an account for six months can boost your credit score by 50 points. 

Spread out loan and credit card applications by at least three if not 12 months. Each application, whether successful or not, shows for 12 months, but generally only has an impact in the first three months.

7. Keep your credit usage low 

Lenders will look not only at your outstanding balances, but at how much credit you have available in its assessment of your risk. 

If you have low available credit, prospective lenders may see this as a sign that you’re not successfully managing your finances. 

Experian says that borrowing more than 90% of the limit on a credit card can knock 50 points off your Experian credit score. Meanwhile, keeping your balance below 30% of the limit will boost it by 90 points. Keeping your credit card balance below £50 can give you a boost of 60 points.

 

How long will this take to boost my score?

 

Data from finance providers is usually fed through to CRAs every four to six weeks. So if you can reduce your overall credit usage to around a third of your overall limit across your cards, you can help boost your score fairly quickly.

8. End financial associations with ex-partners 

Living with or being married to someone who has a bad credit rating won't affect yours, but taking out a joint financial product with them will. 

Opening a joint current account, for example, will create a 'financial association' between you and the other account holder. 

Lenders may look at their credit report as well as yours when assessing your application, as their circumstances could affect your ability to make repayments. 

If you have ever jointly held a financial product with someone you no longer have a relationship with, ask all three credit reference agencies to break this link so that your ex-partner's financial situation doesn't have an impact on any credit applications you may make in the future. 

 

How long will this take to boost my score?

 

Breaking a financial link with an ex-partner or ‘disassociating’ could boost your score within a month.

9. Avoid CCJs and bankruptcy

Being declared bankrupt, entering into an Individual Voluntary Arrangement (IVA) or having a County Court Judgement (CCJ) made against you will badly affect your creditworthiness.

According to Experian, receiving a CCJ will knock 250 points off your score and defaulting on an account will mean a 350 point reduction.

So it's worth checking if there are any alternatives to these routes if you are in financial difficulty.

Usually, it takes six years for individual voluntary arrangements or court judgments to disappear off your credit report. At that point, you should see an immediate change in your score.

Find out more: 44 tips on paying off your debts 

10. Pay more than the minimum

Making just the minimum repayment on your credit card each month may lead lenders to assume you're struggling to clear your debts. 

Instead, try paying more than the minimum or the full amount each month to help you clear debt faster.

11. Never miss a repayment

Showing that you can repay on time and stay within the credit limit you've been given will help convince lenders you're a responsible borrower.  

Inform your lenders as soon as possible if your debts are proving too difficult to handle. It’s better to seek their help than to repeatedly miss loan or credit card repayments with no explanation.

If you are late with a payment or miss one, it will show up on your report within a month. One late payment on a credit card or loan can dent your score by as much as 130 points, according to Experian.

To help people struggling financially during the coronavirus pandemic, lenders have been offering payment holidays of up to three months which shouldn't impact your score.

A missed payment will show on your report for six years, although its effect will lessen. If you’ve missed only one payment, your score could start to recover after around six months and should be fully recovered after a year.

12. Use a credit builder credit card

If you've never borrowed money before, you might assume this means you have a good credit score. In fact, this is unlikely to be true.

That's because when assessing your application, lenders look for evidence that you'll be able to pay back what you borrow, so having no record of successful repayments can count against you.  

Experian estimates 5.8 million people have a ‘thin file in’ the UK. This means that credit reference agencies don’t hold any information on you which makes you invisible to the financial system. This can lead to not being able to access products such as a mortgage, loan or credit card, or facing higher costs than others.

Consequently, you may find that you're turned down for credit cards and loans – especially those on the cheapest rates - even if you could comfortably afford to pay them back.

One solution is to take out a credit card specifically designed to help you build - or rebuild - your credit history.  

However, as these 'credit builder' cards are aimed at higher-risk customers, APRs tend to be very high, so you should never use them to borrow. 

 

How long will this take to boost my score?

 

It takes six to 12 months of paying on time for someone who’s never officially borrowed before to improve their credit score.

Find out more: compare credit cards for improving your credit rating with Which? Money Compare

How fast can you raise your credit score?

Improving your credit score is a marathon not a sprint. 

Some actions may make a swift change, but credit scores are determined by a combination of factors, so you may have to address a number of issues over some time to see a difference. 

Coronavirus: will payment holidays affect my credit score?

Applications for formal payment holidays were set to close on 31 October, with banks agreeing to offer ‘tailored support’ to borrowers who needed it thereafter.

But on 2 November, the Financial Conduct Authority (FCA) announced proposals to extend mortgage payment holidays. The following day, it announced plans to also give other borrowers affected by the coronavirus crisis further support.

In its proposals, the FCA says firms shouldn’t report those in receipt of a payment holiday up until 31 January 2021 as having a missed payment on their credit record.

However, those who have already had two payment holidays – and high-cost, short-term credit customers who have already had one – would not be eligible for any additional payment deferrals and must instead talk to their lender about getting ‘tailored support’.

This tailored support may be reported on a customer’s credit file, but lenders should always inform you as and when this is the case.

Find out more: will a coronavirus payment holiday impact your credit score?

Credit score FAQs

Got a burning credit score question? See if we've covered it in the Q&A below.

 

Why have I got a bad credit score?

 

There are a range of reasons you could have a bad or low credit score.

You should check your credit report at all three credit reference agencies and see if all the information is correct.

You might not be registered on the electoral roll, have been late or missed payments on credit products in the past, been declared bankrupt or have a County Court Judgement (CCJ) made against you that could be dragging your score down.

 

Why can having no debt give you a bad credit score?

 

If you have never borrowed money, you might assume this means you have a good credit score. In fact, this is unlikely to be true.

That's because when assessing your application, lenders look for evidence that you'll be able to pay back what you borrow, so having no record of successful repayments can count against you.

Consequently, you may find you are turned down for market-leading credit cards and loans even if you could comfortably afford to pay them back.

 

What should I do if I'm refused credit? 

 

If you're refused credit, you don't have a legal right to be told why. 

If a rejection is based on information obtained from a credit reference agency, the creditor must simply tell the borrower that this is the case and provide details of the agency concerned. 

They are not obliged to offer any further information, but it is always worth asking. 

If you feel you've been turned down for credit unfairly, you can appeal and supply further information to support your application. 

If the decision not to lend to you was made by an automated system, you can ask for this to be reviewed. 

Should you still find yourself unable to get the credit you originally applied for, it’s important not to apply for another credit card or loan immediately as this could cause you further problems. 

Instead, you should check your credit report and take steps to improve your credit rating before trying to borrow from another lender.

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