How to help improve your credit score
Your credit score is based on your history of borrowing and repaying money, so it’s not something that can be changed overnight. However, there are ways to strengthen your credit score over time.
Your credit score might not be in a good shape for two key reasons; firstly because you have bad credit, or secondly because you don't have enough of a credit history for lenders to assess your behaviour. Whatever stage of life you’re at, we’ll help you understand the factors that impact your credit score so you can work towards a better one.
Scenario 1: You have a bad credit history, or you’d like to improve your score
If you have a poor credit history, this is translated into a poor credit score. So for example, if you’ve missed payments or frequently exceeded your credit limit, your credit score might have suffered. Even if you have an average credit score, you may want to improve it – you can start making a difference by following these steps:
- Review your Equifax Credit Report and Score. They are included with Equifax Protect and will help you understand your credit history, and the information lenders see when you make an application for credit.
- See what you can improve. Your Equifax Credit Report is traffic light coded so you can easily see which areas are good – and where you need to focus. It’s this information that your Equifax Credit Score is based on.
- Change your behaviour. It’s all about staying on track. Avoid missing payments and exceeding your credit limits, and ensure your credit accounts aren’t regularly being used to their limits – as this could indicate that you’re spending more than you can afford.
- Be patient. There are no quick fixes when it comes to your credit history, as you need to build up a history of good behaviour before your credit score can improve. But with time and patience, this can be achievable.
Scenario 2: You have a 'thin' credit file and need to establish a credit history
For people with little credit history or a 'thin' credit file, you can start to establish a credit history and show lenders you are capable of managing credit:
a) You’ve never had credit. This may be the case if you’re young, or if you’ve recently moved to the UK.
b) Your credit history is limited. This could be because your credit report doesn’t yet have a history of you managing credit and making payments on time. Or it could be because you haven’t needed credit over the past six years.
If you have a 'thin' file, you can start to build it and show lenders you are capable of managing credit:
- Consider opening new credit accounts and paying them off. Take out a small amount of credit and repay it regularly, without missing any payments.
- Use these new accounts in moderation. Make payments that are more than the minimum and stay well within your credit limit to demonstrate that you can manage your credit. Lenders with more lenient eligibility requirements typically charge higher interest rates so ensure you pay in full every month to avoid interest charges.
- Register on the electoral roll with your current address. Lenders will typically regard this more positively. The electoral roll is also used by organisations for identity checks – to confirm you live where you say.