Yes, there are many ways to improve your credit score, but there is no quick fix. It often takes time and patience, so if you want to increase your chances of being approved for a loan, you will need to commit to making long-term changes to your spending habits. However, not all methods of improving your credit score take that long to affect your score. Take a look at our list below to find out the most common strategies consumers can adopt when trying to improve their credit score:
Register on the electoral roll at your current address: This will help credit reference agencies confirm your identity, which will reduce your perceived risk as a borrower.
Close any unused accounts: If you have many credit accounts available to you, your overall credit will be high. Some lenders may feel you won’t be able to cope with the financial responsibility of further credit and might reject a loan application on this basis.
Use as little credit as possible: If you may have a large amount of credit available to you, but if you only use a small percentage of this credit, it could indicate to potential lenders that you are financially stable. However, as noted above, low credit utilisation spread across a large number of accounts could hurt your score. If lenders are concerned, you may choose to use all of your available credit in the future.
Meet your repayments every month: If possible, you should clear each credit account each month as this shows lenders that you are a reliable borrower. However, you can also boost your score simply by paying off the minimum amount according to your repayment schedule.
Build your credit history: Credit reference agencies analysing a sparse credit report may assign it a lower score with no information to go on. To prove you are a reliable borrower, build up your credit history by opening a bank account, keeping on top of your household bills and taking out an affordable credit card that you can pay off each month. While this is a long-term solution, it is crucial for those with little or no credit history.
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