Can you improve your credit score fast?
You may want to change your credit rating overnight, but there’s no real quick fix. It’s never too late to start though.
The length of time it takes to rebuild your credit history depends on the reason why you’ve got a poor credit score. Negative factors, including late or missed payments, can be seen on your credit report for a minimum of 6 years, and public record items like bankruptcy or County Court Judgements (CCJs) can remain there for up to 10 years, so it’ll take a fair bit of time to repair the damage done by these.
Credit searches, which are carried out by financial institutions to check your credit file when you make an application, can stay on your file for up to 2 years. They may not have as much of a negative effect on your file though.
How to improve your credit rating
There are a whole host of ways to increase your credit score to prove to providers you’re a responsible borrower. These include:
- Making sure your details are up to date, and everything on your credit file is reporting correctly.
- Never missing a repayment and always having credit available.
- Creating a history of responsible borrowing and closing inactive accounts.
- Paying off debts and checking your joint finances (accounts you might have with someone else, like a mortgage or bank account).
- Lenders usually look for stability, so things like having a telephone landline, and maintaining a long-term relationship with a bank can help.
- Always looking out for fraudulent behaviour.
- Consolidating your debts and reducing your number of credit applications.
- Registering to vote and, if you rent your home, signing up to a private tenancy scheme.
Whether you have no, or very little history of borrowing, a low score, or simply want access to better rates, there are plenty of things you can do when it comes to building a better credit score. Here’s a detailed breakdown of some steps you can take to improve your credit rating:
1. Make sure your credit record is correct
The first thing you should do is to check your credit report and make sure it doesn’t contain any errors. Though it’s rare, mistakes sometimes happen and they can scupper your chances of a successful credit application. If there are late payments listed, check they’re correct and question any you think are wrong with the lender who’s reported them. You can learn more about how to check your credit score here.
2. Register to vote
A better credit rating is just a few steps away when you sign up to the electoral roll. It’s one of the simplest things you can do when it comes to improving your credit score. Online registration is open all year round, with just a few straightforward questions to answer. As well as boosting your score, there’s the added bonus that it can help providers check your address and ID without delay. It’s a win-win.
3. Double check your personal details
It’s really important all your debts are registered in the right name and to your current address. Not updating your information can cause problems when applying for credit and may be seen as a sign of instability, or even flag up as fraudulent.
4. Never miss a repayment
While making a late payment or accidentally missing a payment might just be a one-off blip, it can seriously impact your credit score. Managing your account online and setting up a Direct Debit are some of the ways you can stop this happening.
5. Create a history of responsible borrowing
Every provider wants a sensible borrower. They appreciate applicants who make repayments on time and keep within agreed credit limits. It could be something as small as a monthly mobile phone contract or a digital streaming service subscription, but if you demonstrate you can manage credit well, it could go a long way to helping you increase your credit score.
6. Close inactive accounts
Unused cards can easily pile up. If you no longer need them, it’s good practice to shut your accounts permanently. Providers look at credit limits available to you, as well as what you owe. You’ll also reduce the risk of fraud by closing unused accounts.
7. Pay off your debts
This is a key step to take when looking at ways to improve your credit score. Use your income to pay off as much as you can afford each month above the minimum payment to reduce what you owe.
8. Demonstrate a long-term record with the same bank
A lasting relationship with a bank can be a real plus for your credit application. Some providers believe this is a good demonstration of a stable financial lifestyle and shows an increased likelihood you’ll pay back what you’ve borrowed.
9. Maintain a good volume of available credit
This is the difference between your credit limit and outstanding balances, and could impact your rating. Low available credit can be a red flag for some providers, who might view having lots of accounts with less than 50% available as a sign you’re struggling to manage your money.
10. Reduce your credit applications
A record of a credit check is made every time you apply for any form of credit. If providers can see multiple checks being made in a short space of time, it may sound the alarm bells. Make fewer applications and you could improve your rating.
Alternatively you can use our eligibility checker, which tells you if you’re eligible to apply for an MBNA credit card without affecting your credit rating. It only registers a ‘soft search’ which doesn’t show as a full-application search on your credit file.
11. Consolidate your debts
Consolidating, or putting together, more expensive credit accounts could improve your credit rating, and also make your debts easier to manage, as you’ll only have one payment to make each month.
12. Watch out for fraudulent behaviour
Keep an eye on your credit report in order to spot any signs of financial fraud. Look out for new credit accounts you don’t remember setting up, and query anything you don’t recognise.
13. Install a landline
This is a super-simple step to take when you’re looking at potential ways to increase your credit score. A landline phone contract may be seen by providers as a sign of stability. Although it may only have a minimal effect, every little thing you can do to boost your score helps.
14. Check your joint finances
Your partner’s finances could impact your application if you have a joint account, like a mortgage or loan. If they’ve got a poor credit history and you’re financially linked, it can hinder your score. Where necessary, keep your finances separate to maintain your access to good credit.
15. Try a credit builder card
If your credit rating is very low, you can start restoring it with a rebuild card. Although they often come with a sizeable APR, providers do tend to accept people with a poor credit history. The best way to use this type of card is to spend minimal amounts and pay them off in full each month to avoid any interest charges. Do this for a year or so and you may see your score improve.
As you can see, there are a whole host of fairly simple measures you can take to strengthen your credit score. But don’t make this a one-off exercise - continuously try to improve your rating and you’ll not just increase your chances of getting access to better rates, you’re also likely to change your financial habits for the better.