How to improve your credit score

Your credit score is a number all lenders use to work out the risk of lending you money. Lenders usually view your credit score through an agency. There are different credit agencies, and your rating can vary slightly from one to another. It’s not the only consideration, and some lenders will also take other things into account that will raise or lower your credit score.

Your credit score will usually be considered when applying for a mortgage, loan, credit card, store credit, and car finance, amongst others. Unless you pay for everything in full, then your credit score is an integral part of most peoples’ financial wellbeing.

Using Direct Debits to pay your bills on time removes the possibility of you forgetting to make a payment. Paying all your bills on time shows lenders you settle your debts in a timely fashion. Every month you stick to a repayment schedule helps to demonstrate this and reduce the level of a risk you pose.

Being registered to vote at your current address adds legitimacy to any applications you make. Being on the electoral register demonstrates to the lender that you’re a real person, reducing the likelihood that fraud is being committed and increasing your legitimacy. It will also speed up the process if any lender performs an ID check.

A joint bank account with someone with a poor credit score can negatively affect your credit score. While it’s nice to share everything with a partner, joint accounts and finances can create a knock-on effect. While it can make your bills a little harder to share, having a separate account can help to increase your chances of being approved for credit. You can apply to disassociate yourself from a person as long as you have no joint accounts.

Having a small debt, such as a credit card with a £200 limit, or a small loan, helps to create a small credit account. If you pay more off than is required, it will increase your credit score even further. Don’t take on massive debts to improve your score. Keep it small and manageable to prove you can handle it, then when you require more substantial borrowing, you’ll get better rates.

Even mobile phone contracts and utility providers will report to credit reference agencies, so make sure these bills are also paid on time and you will see gradual increases to your score.

Credit reports are sometimes wrong. There can be mistakes in your details, whether you’re on the electoral register or past debts. If you find an error on your credit report, you can contact the credit agency and get the mistake corrected.

Register on the electoral roll. This single action can boost your score by up to 50 points according to Experian. It helps lenders verify your identity and address. You can register at gov.uk/register-to-vote in about five minutes, even if you live in shared accommodation or with parents.

Also check your credit report for errors. Correcting mistakes like wrong addresses or incorrectly marked late payments can improve your score within weeks.

No. Checking your own credit score is recorded as a “soft search” and has absolutely no impact on your rating. You can check as often as you like without any negative effects. Only you can see soft searches on your report.

This is different from when lenders check your file during a credit application, which is a “hard search” and can temporarily lower your score.

It depends on your starting point. Quick fixes like registering to vote or correcting errors can show results within weeks. Building a stronger profile through consistent on-time payments typically takes 3-6 months of positive activity.

If you’re recovering from serious credit problems like defaults or CCJs, expect the process to take 2-3 years of consistent positive behaviour. The good news is that your most recent two years carry the most weight with lenders.

Yes, paying off debt generally helps your score in two ways. First, it reduces your credit utilisation ratio, which is the percentage of available credit you’re using. Second, it demonstrates responsible financial management to lenders.

However, don’t close old credit accounts after paying them off. Keeping them open maintains your available credit limit and preserves the length of your credit history, both of which help your score.

Yes, but it takes time and patience. Start by registering on the electoral roll and opening a bank account. Consider getting a credit builder card designed for people with limited history. Use it for small regular purchases and pay the balance in full each month.

Mobile phone contracts and services that report rent payments to credit agencies also help build your file. Expect to see meaningful improvements after about six months of positive activity.

Like any loan, payday loans appear on your credit report. Repaying on time and in full can actually help build positive credit history by demonstrating you can manage borrowing responsibly.

However, missing payments will damage your score significantly. Some mortgage lenders also view payday loans less favourably, so consider timing if you’re planning a major credit application in the near future.

It varies by credit reference agency since each uses different scales. At Experian, 881-960 is considered good and 961-999 is excellent (out of 999). At Equifax, 531-670 is good and 811-1000 is excellent (out of 1000). At TransUnion, 604-627 is good and 628-710 is excellent (out of 710).

Remember that lenders use their own scoring systems too, so agency scores are indicators rather than guarantees of approval.

You cannot remove accurate negative information before its natural expiry. Late payments, defaults, CCJs, IVAs, and bankruptcy all stay on your file for six years from the date they occurred.

However, you can dispute errors if information is incorrect. You can also add a Notice of Correction explaining exceptional circumstances that caused problems, such as illness or redundancy. Some lenders consider these when making decisions.

No. Your income is not recorded on your credit file and does not directly affect your credit score. The three credit reference agencies don’t collect salary information.

However, lenders will ask about your income separately when you apply for credit. They use this for affordability assessments to ensure you can manage repayments, but it’s a separate consideration from your credit score.

Yes. Some lenders specialise in helping people with bad credit or limited credit history. They focus more on your current affordability than your past credit mistakes.

At PaydayUK, our panel includes lenders who consider applicants with various credit histories. Interest rates may be higher than mainstream products, but options do exist for those who’ve been declined elsewhere.

Soft credit checks don’t appear on your credit file to other lenders and have no impact on your score. They’re used for checking your own report, eligibility checkers, employer background checks, and identity verification.

Hard credit checks are recorded on your file and can temporarily lower your score. They happen when you formally apply for credit cards, loans, mortgages, or some mobile phone contracts. Too many hard checks in a short period can concern lenders as it suggests you’re desperate for credit.

Generally no. Keeping old credit cards open helps your score in two ways. First, it maintains your total available credit, which keeps your utilisation ratio low. Second, it preserves the length of your credit history, which lenders view positively.

The main exception is if the card has an annual fee you want to avoid. In that case, weigh the cost against the potential score impact. If you do close a card, avoid doing so right before applying for new credit.