Your credit score doesn’t just affect whether an application to borrow money is approved. It can also determine the interest rate you pay, and whether a landlord will rent a property to you.

You might think your credit rating will be in excellent shape if you’ve only borrowed to buy your house and you’ve kept up payments every month since then. But that may not be the case.

Having a limited credit history will tend to lower, not increase, your score. Each lender uses a different calculation to arrive at a credit ‘score’, so they may come to different decisions from the same information.

There 3 UK credit reference agencies; Equifax, Experian and TransUnion, that can provide you with access to your credit report. Each agency may include different information from different lenders, so it’s important to check each 1 once a year, or before making any big applications, because they all have an impact. Your checks aren’t recorded on the report so don’t worry about over-checking, it won’t affect your score.

What’s in your credit report?

  • Personal details including your name, date of birth, current and previous addresses and whether or not you're on the electoral register
  • Details of your credit accounts, including credit cards, mortgages, loans and store cards, plus information on any late or missed payments
  • County Court Judgments (CCJs), house repossessions or bankruptcies that have applied to you over the past six years 
  • Details of others you're financially linked to (this could be someone you live with or share a bank account with) 
  • Your current account provider and other account detail

How to improve your credit score

  1. Register to vote so that you’re on the electoral register, or re-register if you’ve moved house at your vote matters website
  2. Check that the information that credit reference agencies are holding about you is correct and up to date. There are 3 UK credit reference agencies; Equifax, Experian and TransUnion. If a credit reference agency refuses to correct a mistake in your file, you can add a notice of correction to your report or make an official complaint to the Financial Ombudsman
  3. Reduce your debts wherever possible
  4. Each application for credit is recorded on your file for 12 months. Too many applications in a short space of time can make you look desperate, and mean being rejected
  5. Ask for a quotation or soft search rather than a credit search before you make an application. That way you’ll have a good idea as to what rate you’ll be offered and whether you’ll be approved
  6. Cancel any credit cards you don’t use
  7. Use consistent details when you apply for credit
  8. Join the rental exchange initiative. This will boost your credit score when you pay your rent on time. You can join here: experian.co.uk/rental-exchange
  9. Pay your bills on time or get in touch with the company first if you’re going to be late paying
  10. If you no longer have a relationship with someone you’re financially linked to, write to credit reference agencies to ask them to update your file
  11. Avoid payday loans. Traditional money lenders often consider using them to be evidence of poor money management
  12. Check your credit report regularly and report any suspicious activity
  13. Apply for a credit card that’s appropriate for your current credit score. Spend a small amount and then pay it off each month

If you’re concerned about your credit history or it’s having an impact on your finances, CABA can help. Our specialist debt advisors will work with you to help you get things back on track. All of our services are free and strictly confidential.

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