How to Improve Your Credit Score

Learn how to improve your credit score in the UK with clear, practical tips. Boost approval chances, lower borrowing costs, and build trust.

How to Improve Your Credit Score

A healthy credit score isn’t just a number on a report — it’s a vital key to unlocking affordable mortgages, low-interest loans, better credit card deals, and even approval for renting a home or getting a mobile phone contract. In the UK, your credit score is used by lenders and financial institutions to decide how risky you are as a borrower. If your score is low, you may face rejections or higher costs. The good news? Your credit score is not set in stone. With the right actions and some patience, it can be steadily improved.

This guide explains what a credit score is, how it’s calculated, and the most effective ways to improve it — whether you’re starting from scratch, recovering from missed payments, or simply aiming for the best deals.

What is a Credit Score?

Your credit score is a number that reflects your creditworthiness — essentially, how likely you are to repay borrowed money. It’s based on your borrowing and repayment history, and is used by banks, lenders, utility companies, insurers, and even some employers when assessing your financial reliability.

In the UK, there isn’t a single ‘official’ credit score. Instead, there are three major credit reference agencies (CRAs) — Experian, Equifax, and TransUnion — each of which scores you using their own range:

  • Experian: 0–999

  • Equifax: 0–1000

  • TransUnion: 0–710

A higher score means better credit health. While your exact number can vary by agency, the principles behind improving your score remain the same.

Who Needs to Improve Their Credit Score?

Improving your credit score can benefit:

  • Young adults with little or no credit history

  • Those with past defaults, CCJs, or missed payments

  • Self-employed individuals who may be scrutinised more closely by lenders

  • Tenants wanting to pass rental checks

  • People planning to apply for mortgages, loans, or 0% credit cards

  • Anyone who’s been rejected for credit or only offered high interest rates

Even if your score isn’t poor, boosting it can unlock better rates, reduce your borrowing costs, and increase your chances of approval.

How Credit Scores Are Calculated

CRAs calculate your score using various data points, including:

  • Your payment history (missed or late payments negatively affect your score)

  • Your credit utilisation (how much of your credit limit you’re using)

  • The age of your credit accounts

  • The types of credit you have (credit cards, loans, mortgages, etc.)

  • The number of recent applications for credit (too many can lower your score)

  • Whether you're on the electoral roll

  • Any County Court Judgements (CCJs), bankruptcies or IVAs

They do not look at your income, student loans, savings, or council tax arrears.

Practical Ways to Improve Your Credit Score

1. Register to vote

Being on the electoral roll helps confirm your identity and address, which boosts your score. You can register online at GOV.UK.

2. Pay all bills on time

Whether it’s a credit card, loan, or utility bill, late or missed payments can damage your score. Setting up direct debits can help ensure you never miss a payment.

3. Keep your credit utilisation low

Try to use less than 30% of your credit limit on credit cards. For example, if your limit is £1,000, keep your balance under £300.

4. Check your credit reports regularly

You’re entitled to a free statutory credit report from each agency. Look for errors, outdated accounts, or fraudulent activity. Dispute any inaccuracies.

  • Experian: experian.co.uk

  • Equifax (via ClearScore): clearscore.com

  • TransUnion (via Credit Karma): creditkarma.co.uk

5. Build credit with a responsible product

If you have a thin credit file, consider a credit builder card or a small loan you can repay in full. Products like LOQBOX or Experian Boost allow you to demonstrate responsible financial behaviour.

6. Avoid multiple credit applications in a short time

Each application leaves a mark (a hard search) on your report. Too many in a short period can signal desperation and harm your score.

7. Keep old accounts open (if used responsibly)

The longer your credit history, the better. Don’t close old credit cards unless there’s a good reason — especially if they have a long and clean record.

8. Add your name to household utility bills

If you're renting or living with parents, having utility or mobile contracts in your name can help build a stronger credit file.

Pros and Cons of Improving Your Credit Score

Pros:

  • Better chances of credit approval

  • Access to lower interest rates

  • Higher borrowing limits

  • Increased trust from landlords or service providers

  • Long-term savings on financial products

Cons:

  • Improving your score takes time — often months, not weeks

  • Some tools (like credit-builder loans) may charge fees or interest

  • Too much focus on boosting scores can lead to unnecessary borrowing

Real-World Examples

Example 1: First-Time Buyer

Jess, 27, had a decent income but a thin credit file. She was rejected for a mortgage because lenders couldn’t see her financial track record. After six months of using a credit-builder card and registering on the electoral roll, she reapplied and was approved at a better rate.

Example 2: Recovering from Defaults

David had two missed loan payments in 2020 during furlough. These stayed on his file for six years. However, by consistently paying bills on time and keeping his credit card balances low, he raised his score enough to get a 0% balance transfer deal, saving hundreds in interest.

Legal and Tax Considerations

Your credit file doesn’t include income or savings, and it doesn’t affect your tax directly. However, a poor credit history may impact your ability to secure finance for a business or get favourable terms on property investments.

Bankruptcies, IVAs, and CCJs have a severe impact and stay on your file for six years. You’re legally entitled to request your credit report and challenge errors. Credit scores themselves are not regulated, but the data used must follow UK GDPR and FCA guidelines.

Are There Alternatives?

There’s no true substitute for a good credit score, but:

  • Guarantor loans may help those with poor credit get access to borrowing (though they’re high risk)

  • Buy Now Pay Later (BNPL) options may not always report to CRAs, so they don’t help build credit unless specifically stated

  • Joint credit applications (e.g. with a partner) can sometimes help but may also link you financially, affecting your score based on their behaviour

Expert Tips to Stay Credit Healthy

  • Set reminders for all payment dates

  • Keep your credit card balance under control, even if you can borrow more

  • Don’t cancel all old cards — use one occasionally and pay it off in full

  • If you’re financially linked to someone with bad credit, consider breaking the association by contacting the CRAs

  • Avoid payday loans — they may be a red flag to mainstream lenders

Final Thought

Your credit score is more than just a financial rating — it’s a representation of trust. By taking practical steps and being consistent, you can rebuild or boost your score over time. Start with small, deliberate actions, and over the months, you’ll see a meaningful improvement that opens doors to better deals, lower costs, and greater financial freedom.