How to improve your credit rating and credit score

Whether you’re looking for a credit card, a loan, a mortgage or even a new mobile phone contract, your credit rating and credit score play an important part in whether or not you get accepted for credit and therefore, the deal you want.

Don't panic if your credit score isn't perfect – our top tips could help you to improve your credit score and make your credit report look more appealing to potential lenders.

You can also compare credit cards designed to improve your credit rating.

How to improve your credit rating

Step-by-step on how to improve your credit score

1. Check your credit report

Lenders look at your credit report when you apply for a loan, credit card, mortgage or any other type of credit account to see what you already owe, how well you are keeping up with your repayments and whether you can afford to borrow more.

Checking your credit report can help you to improve your credit score because you can check how accurate it is and that it reflects your circumstances.

2. Make sure you're on the electoral roll

If you haven't done so already, register to vote at your current address - lenders use the electoral roll to check that you live where you say you live, so it can help to improve your credit report.

If you aren't registered or are listed at another address, the lender may ask for further proof of your identity and address, or could even turn your application down.

3. Get your name on household bills and pay on time

If have a history of paying your bills on time it can help to improve your credit score.

However, if you miss payments or don't make them on time, as well as incurring penalties, a note will stay on your credit report for at least three years - which could give a bad impression to lenders.

4. Close any credit accounts you don't use

It can help to improve your credit score if you close any credit accounts you don't use.

When looking at your credit report, lenders take into consideration the amount you could borrow, not just what you actually owe.

As a rule, it's better to have a few well-managed accounts, than a lot of accounts which you don't use.

5. Think about consolidating your debts

Consider consolidating your debts - identify which of your credit accounts are most expensive and see if you could consolidate them into a one, lower-cost loan.

This won't directly improve your credit score, but it could your debts more affordable right now (though, generally consolidating debt costs you more in the long run and should always be approached with caution).

But if this enables you to close several credit accounts you struggle with, it could help improve your score as you'll have fewer accounts open.

6. Don't apply for lots of credit accounts in a short space of time

Each time you apply for credit and a lender looks at your credit report, a record of their check called a 'footprint' is made. If other lenders see a lot of footprints on your account in a short space of time it may hurt your chances of getting credit.

Keep the number of footprints on your credit report down and it could help to improve your credit score.

7. Build a credit history

Many people struggle to get the credit they want, not because they have a bad credit history, but because there isn't enough information on their credit report for lenders to go on.

Lenders want to see evidence that you're a responsible borrower and if you haven't taken out many credit accounts before, this history won't be there.

8. Be careful of credit repair companies

Exercise caution when it comes to credit repair companies claiming they can improve your credit score.

Credit repair companies claiming that they can remove or change the data on your credit report often charge hefty fees and may not be able to deliver on their promises.

9. Set the record straight

Check your credit report regularly to make sure that all the information it contains is correct. If you notice any errors, you can contact the relevant lender and ask for them to be corrected - you will be expected to provide proof that a mistake has been made.

If you have a good reason for any credit problems, for example if you were ill and couldn't make your payments on time as a result, you can add something called a Notice of Correction to your account.

Potential lenders will be able to see this explanation - again, be prepared to provide proof.

10. Protect your identity

Check your credit report regularly for unfamiliar or suspicious entries, like a new account you didn't open, an increase in the amount you owe which you can't explain or new applications for credit you didn't make - these could all be signs that you've been a victim of identity fraud.

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