Your credit score can play an important role in determining your creditworthiness and may impact your ability to obtain loans, credit cards and favourable interest rates.

Improving your credit score is a step towards financial stability and could open up increased borrowing opportunities. Here, we look at some ways in which may help you effectively improve your credit score.

Check your credit report

Start by obtaining a copy of your credit report from one or more of the credit reference agencies, such as TransUnion, Experian, Equifax or Crediva. Carefully review your report to ensure that all information is up to date and accurate. If you do find any errors or discrepancies, report them to the credit reference agency, and request a correction

Supacompare partners with TransUnion, one of the main credit reference agencies in the UK, to provide our customers with their free credit report. Sign up for your Supascore here.

Register on the electoral roll

Lenders can use this information to check your identity and address information. If you aren't already registered, being on the electoral roll could help to improve your credit score, and more importantly, help you build up a credit profile.

Credit history

Generally, a longer credit history demonstrates reliability and stability. If you have a short credit history, where possible, avoid closing old accounts as they can contribute to the overall length of your credit history. By keeping older accounts open, using them responsibly and making timely payments, you may improve your credit score over time.

Make timely payments

Late or missed payments can have a significant negative impact on your creditworthiness. To improve your credit score, it is important to consistently make payments on time as paying bills on promptly , including credit card balances and utility bills, demonstrates responsible financial behaviour to lenders. To ensure you never miss a due data, set up automatic payments or payment reminders.

Reduce credit utilisation

Credit utilisation is the amount of credit you are currently using in comparison to your credit limit. To show lenders that you are responsible with credit, aim to keep your credit usage below 30%. If possible, consider paying down outstanding balances and avoiding maxing our your credit cards.

A healthy mix of credit

Lenders may like to see that you can responsibly handle different types of credit. Having a healthy mix of credit types, such as loans, mortgages and credit cards may positively impact your credit score. However, it is important that you only take out new credit if you are able to manage it responsibly.

Resolve outstanding debt

Addressing any outstanding debts may help improve your credit score. You may wish to consider developing a repayment plan and working towards paying off your debts systematically. Through the demonstration of your commitment to debt repayment, you may positively influence your creditworthiness.

If you are struggling with debt and need help, please visit MoneyHelper for free and impartial advice.

Minimise new applications for credit

Limit new credit applications to essential needs and avoid applying for multiple credit accounts within a short period. Multiple enquires within a short time may indicate to lenders that you are actively seeking credit and they may consider you a high risk borrower.

Strong financial foundation

By building and maintaining a strong financial foundation, you could improve your credit in the long run and establish a strong financial footing:

• Avoid excessive borrowing

• Keep you accounts in good standing

• Responsibly manage your finances

• Budget effectively

• Save for emergencies

• Prioritise financial obligations

It is a gradual process to improve you credit score, and it requires consistent effort and responsible financial behaviour. By checking your credit report, lengthening your credit history, making timely payments, reducing credit utilisation, resolving outstanding debt, minimising new credit applications and building a strong financial foundation, you can take control of your creditworthiness and improve your chances of accessing finance at favourable rates.

Editorial Disclaimer: This article was updated 31.05.2023

Opinions expressed here are the author's alone, and not those of any bank, credit card issuer or any other company. This article has not been reviewed, approved or otherwise endorsed by any of these organisations.

NB: The information on this page does not constitute financial advice, please do your own research to ensure that the product / service is right for your individual circumstances.