If you've checked your credit score recently and found yourself a little disappointed by the number staring back at you, you're certainly not alone. But what can you actually do to improve your credit score?
Whatever the reason for your disappointing score, the good news is that there are practical steps you can take to improve it and get your finances into better shape.
Of course, improving your credit score isn't usually something that happens overnight. Some changes may make a difference relatively quickly, while others take a little more time and patience. The trick is knowing which changes will make the biggest difference to you, and that's something we'll cover here.
In this guide, we'll walk you through how to improve your credit score in the UK, from fixing errors on your report to getting existing debt under control. We'll also explain why your credit score doesn't necessarily tell the whole story when it comes to making a loan application, and how Salad looks beyond your score to get a fuller picture.
What Affects Your Credit Score?
Your credit score is calculated using information held by credit reference agencies about how you've managed credit and certain other financial commitments.
In the UK, different agencies use different scoring systems, and this means there is no such thing as a single,
universal credit score (you can learn more about this in our guide to why credit scores differ between providers).
Several factors can influence your score. These include:
- Payment history: If you've made repayments on time or have missed payments, defaults or arrears.
- Credit utilisation: How much of your available credit you're currently using.
- Outstanding debt: How much you owe across your loans, credit cards and other borrowing.
- Recent credit applications: If you've made several applications for new credit within a short period.
- Accuracy of your information: Whether or not your credit report contains correct, up-to-date details.
A higher score may improve your chances of accessing certain financial products or being offered better terms, but it won't guarantee approval. Lenders typically consider several factors when deciding whether to accept an application.
How Long Does It Take to See Your Credit Score Improve?
How quickly you'll see a change depends on what's affecting your score in the first place, and what you do about it
Some changes, such as correcting an error or reducing your credit card balance, could improve your score within a few weeks, once the updated information reaches the credit reference agencies.
However, if your score has been affected by missed payments or defaults, then the process may take longer. These details can remain on your credit report for up to six years, although their impact may reduce over time.
So while there's no guaranteed shortcut, understanding what's affecting your score can help you decide what to tackle first.
8 Ways to Improve Your Credit Score
Ready to make some positive changes? Here are eight practical steps to consider, depending on what's currently affecting your score.
1. Check Your Credit Report for Errors
One of the first things to do when trying to improve your credit score is to make sure the underlying information is accurate.
You can request a statutory credit report for free, and checking your own report won't lower your score. It's also worth checking more than one credit reference agency, as the information they hold may differ.
Pay particular attention to:
- Incorrect addresses or personal information.
- Payments recorded as late when you've actually paid them on time.
- Accounts that should be marked as closed or settled.
- Debts or credit agreements you don't recognise.
- Incorrect financial associations with other people.
If you spot something that doesn't look right, ask the credit reference agency to investigate, or contact the organisation that supplied the information directly. Correcting confirmed mistakes could give your score a welcome boost.
Your report can also help you work out where to focus your efforts. High credit card balances, recent missed payments and multiple hard searches may all offer clues about what's affecting your score. Once you've identified the potential causes, you can concentrate on the changes most relevant to your circumstances.
2. Register to Vote at Your Current Address
If you're eligible to vote in the UK, getting yourself on the electoral roll is a simple step that could help improve your credit score.
Being registered helps credit reference agencies and lenders confirm your identity and address. This gives them greater confidence that you actually are who you say you are.
Have you moved house recently? Make sure your registration is up to date, as your details won't necessarily follow you to your new address automatically. You can register or update your details in just a few minutes through the GOV.UK electoral registration service.
And if you're not eligible to vote, don't worry. You can still help keep your credit report in good shape by making sure your personal details and address information are consistent across all of your financial accounts.
3. Pay Your Bills and Credit Commitments on Time
Paying on time is one of the most effective ways to improve your credit score. Missed payments can leave a mark on your credit record, and so keeping up with repayments wherever possible can make a real difference.
Consider setting up direct debits or payment reminders for your credit cards, loans and other commitments. This will help you keep on top of everything and prevent you from missing payments by mistake.
If you've already missed a payment or if you're worried you might be about to, get in touch with your lender as soon as you can. They may be able to offer support or discuss alternative repayment arrangements to help you get back on track.
4. Reduce Your Credit Utilisation
Credit utilisation is how much of your available credit limit you're currently using. Many people might think it's up to them to decide how much to use or not to use at any given moment, but this can actually make a real difference to your credit score.
Let's say you have a credit card with a £2,000 limit and a balance of £1,000. This means your credit utilisation is 50%. Pay that balance down to £500, and your utilisation drops to 25%.
As a general guideline, keeping your credit utilisation below 30% may help improve your score, although there's no universal standard that works in all cases.
And an important note: if your utilisation is currently high, don't start panicking and thinking that you now need to clear everything at once. Reducing your balances gradually, as and when you can afford to, can be enough to improve your score. Even a relatively small reduction could make a difference once your updated balance is reported.
5. Consider Whether a Credit Limit Increase is Suitable
Although it might seem counter-intuitive, increasing your credit limit without increasing your spending can be another way to reduce your utilisation, and potentially improve your score.
With a higher limit, the same outstanding balance represents a smaller proportion of your available credit. Although an improvement in your credit score is not guaranteed, managing your borrowing responsibly and keeping your spending under control could give you the opportunity to improve your credit score over time.
A higher limit won't be right for everyone. If having access to more credit might make it harder for you to manage your borrowing, then focusing on reducing your existing balance could be a better option.
Your provider may also carry out a credit check before agreeing to an increase, so you should ask whether a hard search will be run before you apply.
6. Watch Out for Fraud and Identity Theft
Checking your credit report regularly isn't just about spotting mistakes. It can also help you identify suspicious activity before it causes further problems.
For example, you might notice an unfamiliar credit account, an application you didn't make or an unexpected increase in an outstanding balance.
These could be signs that someone has used your personal information without your permission.
If you spot something suspicious:
- Contact the lender or organisation involved and explain that you don't recognise the account or transaction.
- Report the suspicious information to the relevant credit reference agency.
- Check your other credit reports for any other unfamiliar activity.
- Consider whether you might need additional protection against further identity fraud.
You can also report suspected fraud through Report Fraud if you live in England, Wales or Northern Ireland. In Scotland, contact Police Scotland on 101.
Don't assume that suspicious information will disappear from your credit report automatically. Follow up with the organisations involved and check that fraudulent entries are corrected.
7. Pay Down Existing Debt Where You Can
If you have several outstanding debts, reducing what you owe may help improve your credit score and give you a little more breathing room financially.
Start by reviewing your balances, interest rates and monthly repayments. If you have some money left over after covering your essentials, you could consider putting a little extra towards your more expensive debts.
But remember, improving your credit score should never come at the expense of your everyday needs. There's no need to stretch yourself to make extra repayments if it means struggling to cover rent, food or other essentials.
It's also worth knowing that paying off debt doesn't always improve your score immediately. Paying down a credit card can reduce your utilisation, but paying off a personal loan won't have quite the same effect. In some circumstances, closing a paid-off credit account may even cause a temporary dip in your score. This doesn't mean repaying the debt was a mistake, it simply reflects how the scoring system in question responds to changes in your credit profile. It's also worth remembering that paying off a debt won't automatically remove previous missed payments or defaults from your credit report. Your current outstanding balance may improve, but accurate historical information can remain visible for some time.
8. Limit New Credit Applications
If you're working on improving your credit score, you should be mindful of how often you apply for new credit.
Many lenders carry out a hard credit search when you apply for a loan or credit card. These searches are visible to other lenders, and making several applications in a short period can temporarily affect your score.
If you're thinking about borrowing, look for eligibility checkers that use soft searches before making a full application. These let you explore your options without affecting your credit score.
You can learn more about how they work in our guide to soft credit checks.
Beyond Your Credit Score: How Salad Looks at Affordability
Your credit score reflects your financial history, but it doesn't always tell the whole story. It might be the case that you've had difficulties in the past, but you're in a much better situation today. It can be frustrating when your score hasn't caught up with those changes.
At Salad, we look beyond your credit score. With your permission, we use Open Banking to understand your income, spending and existing commitments, helping us assess whether a loan would be affordable for you.
Applying for one of our new loans won't affect your credit score. If you're approved, we'll report your loan to credit reference agencies, meaning your repayment history can become part of your credit file. Making your repayments on time may help improve your credit history, while missed payments could negatively affect your score.
A lower credit score therefore won't automatically rule you out from a Salad loan, although all applications remain subject to our eligibility and affordability assessments.
Find out more about Salad's approach to personal loans.
Where Should You Start?
This article has covered how to improve credit score, but perhaps you might still be feeling unsure about what to tackle first? Your credit report is a good place to start. Once you've reviewed everything, consider which of these situations best matches yours and act accordingly:
- Your credit card balances are high: Focus on reducing your utilisation, where affordable.
- Your report contains mistakes or unfamiliar accounts: Get these investigated and corrected.
- Previous missed payments are affecting your score: Concentrate on keeping up with current repayments and allowing your positive payment history to develop.
You don't have to tackle everything at once. Start with the changes most relevant to your circumstances and give yourself time to see the results.
Frequently Asked Questions
Can I Improve My Credit Score Quickly?
Some changes, such as correcting errors, updating your electoral registration or reducing high credit card balances, may help once the new information is reflected in your credit report. However, there is no guaranteed way to increase your score overnight.
What's a Healthy Credit Utilisation Ratio?
Keeping your credit utilisation below 30% is a useful general guideline. However, there is no single percentage that guarantees a better credit score, and you should never borrow more than you can afford simply to maintain a particular ratio.
Why Hasn't My Credit Score Improved Even Though I've Been Paying on Time?
Your credit report may not yet reflect your recent repayments. Other factors, such as existing debt, previous missed payments or recent applications, may also be affecting your score.
Should I Take Out a Loan to Improve My Credit Score?
Taking out a loan solely to improve your credit score is generally not a good reason to borrow. Loans come with repayment obligations and potentially interest charges. Only consider borrowing when you genuinely need the money and can comfortably afford the repayments.
