NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

How to improve your credit score

How to improve your credit score
Image source: Getty Images.


Are you struggling to be approved for a new credit card? Or are you concerned that your credit score will prevent you from getting a mortgage? When it comes to borrowing, a good credit score can go a long way. So here are our top tips on how to improve your credit score.

Discover which credit cards you could be eligible for now

Use our free Credit Card Eligibility Checker to discover which credit cards you may be eligible for. It only takes a few minutes and will not affect your credit score!

Find out what credit cards you could be eligible for now

Register for the electoral roll

You may be thinking, ‘What does registering to vote have to do with credit?’ But this is one of the key things to do if you want to improve your credit score. Lenders want to know that you are who you say you are, and that you live where you say you live. The way they check this is to compare the information you give them against the electoral roll. If you aren’t on the electoral roll, then lenders have no way of knowing that you are telling the truth. So it’s best to get yourself registered. You can do this online on the gov.uk website.

Make payments

Lenders are looking for responsible borrowing behaviour, so make sure that you pay any bills on time. Missed payments for loans, credit cards, utility bills or even mobile phone bills will all impact your credit score. If you can show months or even years of making regular payments, this will go a long way to improving your score.

Build your credit history

Your credit score shows lenders what type of borrower you will be, and whether you are likely to repay the amount they have lent you. If you have no credit history, it makes it hard for the lender to assess what sort of risk you are. If that is the case, then taking out a credit card will be the first step to demonstrating you can be a responsible borrower – as long as you pay your balance off in full each month.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

If you are struggling to be accepted for a credit card, consider a credit rebuilder card. This is a credit card designed for those with poor credit scores or no credit history. A credit rebuilder card has lower eligibility requirements than other cards. It also has a low credit limit, which will increase the longer you use the card and demonstrate good borrowing practices such as making your monthly payments and not exceeding your credit limit.

Consider your credit utilisation

Credit rating agencies and lenders look at your credit utilisation – this is, how much credit is available on your credit cards. The general rule is that if you keep your balance below 30% of the credit available, this will not hurt your credit score. However, if your balance creeps up to between 50% and 70% of your credit limit, this could show up as an ‘amber flag’ on your report. If your balance goes beyond 75%, then you are into ‘red flag’ territory. So if you are looking to improve your score, look to get your balance down below that magic 30%.

Check your credit report for mistakes

How many of us have actually seen our credit reports? Before you can go about improving your score, you need to know what information the credit reference agencies hold about you. If you are struggling to be approved for credit, then take a look at your credit report and check for any mistakes. Errors can occur, and one small mistake on your credit file could lead to you having a less than squeaky-clean score. There are several free credit checking services available, such as Credit Karma, which will not only tell you your credit score, but will also alert you if anything out of the ordinary occurs.

How these 5 credit card ‘must-knows’ could help you…

We all know that a bad credit history makes it hard to borrow money – but did you know that improving your credit score could also help secure lower interest rates on credit cards, saving you hard-earned cash?

Find out how you could improve your credit score, and your credit-application chances, with our free report “5 Things To Know Before You Apply For A Credit Card”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

Was this article helpful?
YesNo

Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.