How to boost your credit score in 5 easy steps

Your credit score plays a pivotal part in whether you qualify for credit. Here’s how to boost your score and improve your chances of getting credit.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Close up of credit cards over grey background

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

From school reports to exam results, life can feel like a point-scoring contest. Sadly, that doesn’t stop in adulthood, especially when it comes to your finances. Your credit score (if you didn’t already know) plays a pivotal part in whether or not you qualify for a mortgage, credit card or personal loan.

And just as your school report shows how diligent you are (or not) with your studies, so too does your credit score with your finances. A good or high score shows potential lenders that you’re financially responsible. That means you’re more likely to be approved for credit and be offered the best rates. On the flip side, a low or poor credit score can limit your options.  

Crucially, your credit score isn’t just about paying off your credit card on time. According to Katy Lomax, chief experience officer at financial services provider Capital One, “Being on top of your credit score is really important. If you have a low credit score, it can have a big impact on important milestones in your life, like when you apply for a mortgage or get car insurance.

“Lots of people don’t fully understand what factors can affect their credit score. There are lots of misconceptions around credit scores. You may be on top of your credit card payments but your credit score is based on how you manage all your credit. 

The good news is that experts at Capital One have put together five easy-to-action top tips on how to boost your credit score in 2022.

[top_pitch]

1. Register to vote

Registering on the electoral roll means that lenders can easily confirm who you are. Whether or not you choose to actually vote is up to you, but this is a quick way to boost your credit score without much effort on your part.

If you live in England, Wales or Scotland, you can check whether or not you’re registered by contacting your local Electoral Registration Office. If you live in Northern Ireland, contact the Electoral Office for Northern Ireland.

2. Pay bills on time

This is another easy tip that can help improve your credit score. While it sounds too simple to be effective, it really could boost your score. Paying on time shows you’re responsible and are on top of managing your money. If you’re forgetful, just set up direct debits or set reminders on your phone or calendar.

3. Pay off more than the minimum

If you can afford to, it’s a good idea to pay off more than the minimum on your credit card. This helps to keep your credit balance low and enables you to pay off debts quicker, which will boost your credit score.

4. Don’t go over your limit

This goes back to the old adage of living within your means. Although credit does allow you to buy things you can’t afford right now, it’s not a licence to splurge uncontrollably. That’s not to say you shouldn’t ever treat yourself. Just be mindful of how much you’re spending (and whether or not you really need to).

5. Use an eligibility checker

Each time you apply for credit, a ‘hard search’ is recorded on your credit report that lenders can see. Lots of applications (especially within a short space of time) could make it look like you desperately need credit. This is a red flag for lenders.

Instead, you can use an eligibility checker to do a ‘soft search’ that will tell you what the chances of approval are. These soft searches are not recorded on your credit report.

[middle_pitch]

Where can you check your credit score?

There are four main credit reference agencies in the UK that keep track of your credit score. They work with lenders like banks and other retailers to help them decide whether or not to offer you credit.

You can check your credit score with each agency listed below. Bear in mind that you may have to subscribe to the service to get your free report, so remember to cancel before your free trial ends.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »