How to improve your credit score
If your credit score is less than perfect, any applications for credit cards, loans or mortgages are unlikely to be accepted.
But there are several things you can do to boost your credit rating and improve your chances of qualifying.
1. Make sure you are on the electoral roll
It's vital you are registered on the electoral roll at your current address, as all banks and building societies will check this when processing credit applications. If you aren't, contact your local council and ask for a registration form, or sign up online.
2. Check your credit report
Under the Consumer Credit Act you've a legal right to see a copy of your credit report. It costs just £2 to see the one held by credit reference agencies Experian, Equifax and Call Credit. Go through all the payments on your report and see if there are any errors.
If you do spot a mistake, for example your record shows you missed a payment when you know you didn't and can prove it, you should contact the agency involved and ask them to correct it.
Similarly, if, for example, you've had a County Court Judgement (CCJ) that is now settled, make sure the settlement is recorded on your credit file. If it isn't, contact the court to get confirmation details and inform the credit reference agencies.
If the agency refuses to amend its records, or you want to explain why you missed a payment, you can put a 'notice of correction' on your file, explaining what happened or why the information shown is wrong.
3. Bring down your debts
Reducing the amount you owe on credit cards, overdrafts and loans will help to push your credit score higher. Keeping well within your credit limit will also help.
Try to make more than the minimum monthly payments on your credit cards, as this will demonstrate to lenders that you are a safe bet when it comes to paying back what you owe.
4. Shut down accounts you no longer use
When deciding whether or not to lend to individuals, one of the main factors companies will take into consideration is how much credit they already have available.
That means if you have several cards already which you aren't using, you should close down your accounts as soon as possible.
5. Don't make too many applications for credit
Every credit card application you make adds another 'footprint' to your credit file. If you make several applications, this could adversely affect your credit score and your credit rating, so only apply for a card or other forms of credit if you are confident you will be accepted.
6. Make payments on time
Late or missed payments can seriously damage your credit rating, so if you are juggling lots of debts, make sure you set up a direct debit for each so that payments are made on time.
Demonstrating that you have made all your payments on time for at least six months will start to improve your score - and the longer you keep it up, the better your credit rating will be.
Disclaimer: Any content in our family money section is intended as general information only. For specific advice about your personal financial situation, get advice from qualified, independent, regulated professionals.
Last updated: 3 months ago