How to improve your credit score fast - 17 tips from our finance expert

To make sure you get the best deals on borrowing money, you will need to understand how to improve your credit score if it's not in the best shape.

Whether you are planning on buying a house or taking out a loan, credit card, or mobile phone contract, it's important you check your credit score - as this will dictate the kind of deal you get. 

James Jones, head of consumer affairs at credit reference agency Experian, says: “People should think of their credit report as their financial CV. You wouldn’t apply for a job and let an employer look at your CV without first checking to make sure it’s up to date and paints the best picture of your suitability for the role – so don’t apply for credit before giving similar attention to your credit report. There are plenty of really easy ways to make it shine.”

How to improve your credit score fast

Personal finance expert Holly Thomas has compiled this list of credit score boosting tips.

1. Register on the electoral roll

A great starting point when considering how to improve your credit score is to register on the electoral roll.  It helps lenders confirm your name and address. Without that information, your credit score will be much lower. Being on the electoral roll can also make any credit application process quicker, as your prospective lender won’t need to source other ways to prove your identity or address. You can register online in about five minutes.

2. Pay bills on time

Since missed or late payments could indicate that an individual is financially stretched or lacks responsibility in repaying debts, lenders are unlikely to view you as a decent candidate for further borrowing. Get organised and make sure you can meet all of your financial commitments on time. Set up direct debits and standing orders where you can, to make payments automatic.

3. Keep credit card balances low

How much of your credit card limit you regularly use can have a big impact on scores. This is because it shows how reliant you are on credit. For example, keeping card balances below 30% of the limit can help.

If you've not had a credit card before and are thinking of applying for one, make sure you read our how do credit cards work article to get to grips with the basics, including the different types of cards that are available. 

4. Avoid multiple applications if you want to improve your credit score

Every time you apply for credit of any sort, it shows on your record. While it won’t spell out if you were rejected, multiple applications for credit cards, for example, will suggest your applications are unsuccessful. This looks bad to any other lenders you might apply to. Even just two applications in a short space of time could dent your credit score, making it even harder to qualify for a loan.

5. Let your credit history mature

While it’s sensible to shop around from time to time to make sure you’re getting the best deals, it will help your credit score if you let some of your credit accounts mature. For example, holding the same credit card for five years can add to your score.

6. Correct mistakes

It’s a good idea to check your report well in advance of applying for credit – especially if you haven’t needed to do so for a while. That way you can allow time to rectify any problems. You can get a free credit report from a credit reference agency, such as Equifax, Experian and TransUnion.

You have the opportunity to add brief notes to your credit file, where necessary. In circumstances where you have missed a payment through a genuine problem, you can attach a 'notice of correction' on your report explaining why payments were missed if there were special circumstances such as losing your job or family bereavement.

7. Separate finances with an ex

If you're wondering how to improve your credit score in the wake of a split with your partner, make sure you prioritise separating your finances. Joint finances with a partner will merge your credit status whether it’s a mortgage or a finance deal on a car or sofa. If you split up with or divorce a partner, make sure you sever all financial ties to avoid their potentially bad debts affecting you in the future.

Ask for a financial disassociation form from the credit agencies. You may need to answer a few questions to help agencies make necessary amendments to your record. You will need to sign to confirm that there is no active financial connection or dependency between you and your ex.

8. How to improve your credit score by closing old accounts

Close any credit card or store card accounts you no longer use because a new lender will wonder why you want another line of credit if you already have plenty open to you. Make sure all old accounts are debt-free. Even owing a few pence on an old catalogue account or not clearing a mobile phone bill could cost you dearly.

9. Check your credit report regularly

It’s not uncommon for small amounts to go unpaid and leave a mark on your record – and impact your score. Make sure you keep an eye on your report to ensure it’s in good order. with Equifax, Experian and TransUnion. Alternatively, use CheckMyFile's free trial to check all three in one go. But don't worry, checking your score doesn’t impact your credit history – or score. Only you and the credit reference agency will know about it.

10. Never borrowed? Get credit

Having no credit history can be as bad as having a poor credit history because you’ve got no track record. Matt Sanders, money expert at GoCompare says: “It may sound strange, but if you’ve never taken out any form of credit before, it can actually count against your credit score.”

Sign up for a card and use it for your weekly grocery shop or when filling up with fuel. But make sure you pay it off in full every month to build up a history of borrowing and repaying. This will help you get better borrowing rates in the future.

11. Keep an eye on fraud

Keeping a close eye on your credit report and looking out for any signs of fraudulent activity could help protect your credit score. If you see a surge in the amount you owe, or any applications you didn’t make, you may be a fraud victim. If you do become a victim of fraud, your lenders should fix any damage to your credit report quickly, once they've investigated and established the facts. Ask how quickly they plan to do this if you’re hoping to apply for credit soon and need an urgent correction. It can take up to six weeks for data to be amended but fixing your credit report is a crucial step.

12. How to improve your credit score by using a credit report package

Some of the agencies offer a service that says will boost your credit score. Experian Boost uses Open Banking to factor additional positive information from your bank account into your credit score calculation, such as payments to digital streaming services like Netflix and Spotify. It is free of charge.

13. Avoid using Buy Now, Pay Later

Buy-now-pay-later is a new-style way to purchase items and pay for them in instalments or at a later date, interest-free. Later this year, buy now pay later will be logged on credit files, which could see millions of people having their credit score negatively impacted should they take on debt they can’t afford to repay.

14. Steer clear of payday loans

Payday loans are an expensive way to borrow. They were designed to tide people over until payday. But if used regularly and if you can’t pay on time, the charges, and debt, can spiral out of control. Avoid them at all costs.

15. Use a specialist lender for bad credit

Companies do offer personal loans and credit cards for those with bad credit. Rates might be high and typical amounts could be lower. But there are options.

When it comes to mortgages, there are specialist lenders that are able to take a more pragmatic view of your current financial position. In order to do this they will often use specially trained underwriters to assess your application rather than a computer-based method. Once you secure a mortgage, by making regular monthly repayments you will boost your credit score.

16. Do detective work before applying for credit

If you have a low credit score, make sure you only apply for credit you are likely to get. You can do this by shopping around using eligibility-checking services. That way, you’ll only apply for deals you’re likely to get and avoid collecting multiple ‘hard’ search footprints. Not applying for any new credit for six months can boost your score.

17. Get debt help

If you’re struggling to pay off your debts, speak to the card or loan company.  Ask what help they can offer you while you get back on your feet. If they refuse to help, or make the situation worse, you may be able to complain to the Financial Ombudsman - for free.

If you are unable to repay debts and find yourself borrowing to make repayments, it’s time to switch the focus from your credit score to getting your debts paid off. Getting help from a debt charity is free and they can go through your finances and advise you on the best path to becoming debt free. They can also deal with the bank on your behalf in some cases, sometimes getting them to freeze interest charges. Try Stepchange.org or Nationaldebtline.org.

Why do I need to know how to improve my credit score?

Boosting your credit score means that you become a desirable candidate for borrowing. Having your score looking ship-shape means you’re also likely to pay less for loans. This may be for a personal loan or if you need to remortgage with a different lender. When you want to rent a property there will be a credit check and the same goes if you want to enter a new mobile phone contract.

James Jones, head of consumer affairs at Experian says: “As well as the key to being accepted for loans and credit cards, a good score can be kind to your pocket as it will increase your chances of securing the best deals, such as the headline interest rates, which are often reserved for the top scorers.”

Loan and credit card providers only need to offer their headline rate to 51% of successful customers. The remaining 49% can be offered a different deal which is dependent on your credit worthiness.

How quickly can I raise my credit score?

Timing depends on a few factors but changes can appear within a few weeks. Experian's James Jones estimates that methods to improve scores such as registering on the electoral roll and reducing a large debt can have an impact in 4-6 weeks.

He says: “But it can depend on a number of factors. For example, during the autumn local councils carry out their 'annual canvass', during which monthly electoral register updates are temporarily suspended. But some changes you make, such as registering for Experian Boost, can yield instant results.”

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