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7 Ways to Improve Your Credit Score

If you’ve ever been interested in getting a loan or a mortgage, you probably know what a credit score is and how important it is.

Your credit score represents how likely it is for a lender to offer you money. The better your credit score, the better chance you have of taking out bigger loans for less interest. 

paying online with credit card
Good credit makes you eligible for loans!

Having a good credit score can save you a lot of money in the long run. When lenders see you as reliable, you’ll be charged less interest on the loans you take out.

Your credit score is a direct relation to your risk level – it suggests how likely you are to pay money back on time. 

Fortunately, there are lots of simple ways to boost your credit score to make it easier to get credit cards, loan approvals, and mortgages. Following some of these methods can greatly impact your financial health. So how can you improve your credit score? 

1 – Build Your Credit History 

Your credit history is a record of how you manage your money, and how long you take to pay back loans. It shows how many accounts you have open and how much you owe on each account.  

If you have no credit score, you essentially have a bad credit score: it provides no information for companies to use to assess you. By having a credit history, when you apply for loans or credit cards, there is proof that you are able to manage your finances.  

By having an extensive credit history, you can show your reliability. It will become easier to apply for loans, as you are not a liability.   

2 – Register to Vote 

The electoral register is often used to check and validate your details when applying for a loan. By registering to vote, your details are much more readily available. However, if you aren’t registered, your applicated can be delayed or even rejected.  

It can also give you easier access to things like getting a passport or insurance, as you can be identified quickly. 

woman registering to vote
Being on the electoral register helps lenders access your details.

3 – Don’t Apply Too Frequently 

If you apply for credit multiple times in a short space, it gives the idea that you are reliant on loans and cannot manage your money well. This leads to you being seen as a higher risk, and your credit score can drop as a result. 

If you need to apply for credit multiple times, make sure to space out your applications. Don’t apply more than once every three months, to show you can be responsible with your money.  

Read Now: How to Apply for a Loan 

4 – Keep Credit Utilisation Low 

Your credit utilisation is the percentage of your credit limit that you use. The lower the percentage, the more reliable you seem, as it shows your ability to handle money responsibility. It helps to demonstrate that you’re not relying on credit, and are therefore likely to pay your money back on time. 

It is good to try and keep your credit utilisation below 30% as a general guideline, or you can risk your credit score dropping.  

credit limit
Try to keep your credit utilisation low!

5 – Make Regular Payments on Time 

If you make regular payments on time, you can prove that you are reliable to potential lenders. Even if these are small payments, like a repeat payment for a bill, it can make a big difference to your credit score. 

It shows that you know how to handle money well, and you are not reliant on your credit. Instead, you use it responsibly, and you can maintain a strict schedule with your money.  

Read Now: 7 Different Types of Business Credit and Debit Cards 

6 – Check Your Credit File 

Your credit file shows all of the information about the credit you have used, how you manage your payments, and your credit accounts. There are three main credit reference agencies: 

You can receive your file from each agency for free, and check it for any errors or possible mistakes. It’s important to make sure all of your information is correct, as mistakes can lead to your credit score dropping for no reason, and can make it harder for lenders to trust you.  

checking files for errors
It’s important to make sure your files don’t have any errors.

7 – Begin Small  

Building your credit score can take time and patience. Lenders can’t tell how responsible you are with your money if you have never borrowed before. Get into the habit of borrowing small amounts frequently, and quickly paying them off.  

By taking small amounts of credit, you are proving your responsibility and ability to manage your money. It shows lenders that you are capable of borrowing larger amounts in the future. Paying repeat payments or having an arranged overdraft can boost your credit score significantly. 

Read Now: The Different Types of Mortgages 

To Sum Up… 

Having a good credit score can be really important when it comes to taking out loans or getting mortgages approved. Making these small changes to how you handle your money can go a long way in easing the process. Don’t let it overwhelm you! It’s easier than you’d think. 

For more help on managing your money, the team at Count can help you make the right decisions. Contact us here today! 

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