How to Improve Your Credit Score
Whether you’re going for a mortgage or a mobile phone contract, a credit card or a loan, your credit score (sometimes called “credit rating”) will have a say on what you can afford to borrow.
And because it’s so important, many people want to know how to improve credit scores fast.
Is it possible? If so, how quickly can you do it? Let’s find out...
How Fast Can I Raise My Credit Score?
The short answer is: Not that fast. Sorry!
Generally speaking, your credit history is built up slowly over time. For every on-time payment you make, you’ll receive a small boost to your score.
👉 Check for more: How to Build Credit - Six Steps You Need Follow
How Long Does it Take to Improve Credit Score?
Any new and significant information — about a new bank account or credit card, for example — can take up to three months to reach a credit reference agency (CRA), meaning you won’t see a jump in your score overnight.
And if you make late payments (or miss them altogether), this will damage your score in the short-term. Most negative marks will stay on your file for six years — although lenders tend to pay more attention to your recent credit history, so the impact of a late payment will diminish over time.
How Can I Raise My Credit Score in 30 Days?
While making a significant difference to your credit score in just 30 days is a tall order, there are a few things you can do to nudge things in the right direction.
First, Improve Your Credit Utilization
To improve your credit score, you need to show that you can manage credit sensibly.
This is where your credit utilisation comes into play. For example, if you have £5,000 of credit on a credit card and you’ve spent £2,500 of it, your utilisation is 50%.
Ideally, you’ll want to bring that percentage down (preferably to under 30%). And you can do this in one of two ways. Either you pay off your debts, or you increase the amount of credit.
Obviously, this depends on:
1) Whether you can afford to pay down your debt, and
2) Your creditworthiness.
But if you manage to do either of those, the lender will report the change in circumstances to the CRA, usually within 30-45 days, therefore improving your score.
Next, Close Any Inactive Accounts
If you currently have a number of credit cards, it could throw up a red flag to lenders — even if they’re rarely or never used.
This is because you already have access to a lot of credit, so a lender may be unwilling to issue more in case you draw it down and then struggle to repay it.
Remember: Cutting up the card isn’t enough. You need to contact the provider and close the account.
Finally, Distance Yourself From “Linked” Individuals (If Necessary)
This won’t apply to everyone, but if you have a joint bank account or a joint mortgage with someone, you become financially linked to this person. This means that if they have a bad credit rating, it could pull yours down with it.
If you no longer use the joint financial product, or if you’ve since split up with this person, you need to inform the CRAs.
How to Improve Credit Score in 3 Months (UK)
Okay, so 30 days might be a stretch if your aim is to jump 100-200 points.
But if you do the following, you could see a healthy rise in your credit score inside 3 months:
1. Use Your Credit Card Regularly (and Responsibly)
Demonstrating that you can manage credit is a surefire way of improving your credit score.
And the good news is, there’s an easy way to do it. Spend small amounts of money using your credit card each month and make a point of paying it off before the due date. Lenders will look on this favourably as it shows you can reliably pay back anything you borrow.
2. Register to Vote
Another quick way to improve the way lenders perceive you is to register to vote.
The reason for this is fairly simple: If you’re on the electoral roll, then credit reference agencies can verify your identity, which makes you appear more stable to lenders. And if there’s one thing lenders love, it’s stability.
You can register for the electoral roll on the UK government website.
Not sure if you’re already registered?
You’ll need to contact your local Electoral Registration Office.
3. Take Credit for Your Payments
If you live at home with your parents — or you share with a partner or flatmates — and you’re contributing to the bills, it’s a good idea to add your name to the account. This is because utility bills, like broadband, gas or electricity bills, count towards your credit score.
Likewise, if you have a mobile phone contract that’s still in your parent’s name (perhaps from when you were too young to take out a contract in your own name), but you’re now footing the bill every month, make sure you update it.
Lenders want to see evidence that you’re reliably paying your bills, and they won’t find that if the credit reference agencies can’t draw a line between you and the bills in question.
4. Set up Direct Debits
Speaking of bills, another quick win for your credit file is to make sure you’re paying them on time as and when they’re due. Late and missed payments can harm your credit score as it looks like you’re struggling to manage your credit.
The obvious way to avoid this is to set up Direct Debits to cover your utility bills, credit card payments, mobile phone bills, and any other regular payments you may have.
5. Spot and Fix Errors on Your Credit Report
Lastly, in order to fix your credit score fast, you must first make sure it’s accurate.
If what’s held in your credit report isn’t correct, then your credit score won’t be a fair reflection of your ability to manage credit.
Common errors can include:
- incorrect addresses
- missing, duplicate or incorrect accounts
- fraudulent accounts
- outdated information
- incorrect payment statuses (i.e. something being marked as a late payment when you’ve paid on time)
If you think there’s an issue with your credit report, you’ll need to contact the lender involved or raise a dispute with the credit reference agency in question. The CRAs have 28 days to remove the information you’ve highlighted, or explain why they don’t agree with you.
We hope this article has helped you take steps to improving your credit score. Want to learn more about credit scores? Check out these articles:
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