Working on your credit score requires some will power and patience, but the rewards for your efforts are well worth it. A stronger credit score opens the door to better borrowing options and lower interest rates for greater financial flexibility.
You can gradually strengthen your credit profile and build long-term financial confidence by following the tips discussed below.
Check Your Credit Report and Correct Errors
In the UK, you can obtain your full credit report for free from the three leading credit reference agencies, Experian, Equifax, and TransUnion. Each may hold slightly different data, so it’s worth checking all three.
Review your reports for inaccuracies and outdated entries. You may find discrepancies, such as old defaults that should have expired after six years, or payments wrongly marked as missed. Even minor errors can drag your score down. If you spot any incorrect information, raise a dispute with the relevant agency, which will investigate and liaise with the lender to correct or remove the false information.
Timely Payments: the Cornerstone of Credit Health
Your payment history is the most important factor in determining your credit score. Missed and late payments can remain on a credit record for up to six years, signalling unreliability to lenders. To protect your score, ensure you make every loan and credit card payment on time.
Setting up automatic payments or direct debits is one of the easiest ways to avoid oversights. Alternatively, you could use mobile reminders or budgeting apps to keep track of due dates. Even a single late payment can have a noticeable impact, so consistency is key to avoiding negative results.
Build Credit Gradually and Diversify Responsibly
If you have limited or no credit history, lenders have little evidence of how you handle borrowing. The solution is to build credit gradually and strategically. Start small by taking out a low-limit credit card or becoming an authorised user on a trusted person’s account.
Those seeking a structured way to build credit should consider using a credit-building card to demonstrate consistent repayment behaviour and establish a positive track record. However, you should avoid applying for too many credit accounts in quick succession, as multiple “hard searches” can temporarily lower your score.
Keep Credit Utilisation Low and Manage Existing Debt
Credit utilisation (how much of your available credit you use) plays a major role in your score. Personal finance experts recommend keeping utilisation below 25% of your total available credit. For example, if you have a £2,000 limit, try to keep your balance under £500. It demonstrates an ability to manage credit responsibly to lenders without relying heavily on it.
If your balances are high, prioritise paying them down or consider debt consolidation to simplify repayments and reduce interest costs. Consolidation can make it easier to make payments by merging your debts into a single account, helping you to improve both your financial stability and your credit standing over time.
