How To Improve Your Credit Score

Written by

Cara Bradley

5 min read

Updated: 09 October 2024

What is a credit score, why is it important to have a good one, and what can you do to improve yours?
Viva Money is pleased to share the answers to some frequently asked credit score questions.

What is a credit score?

A credit score is a number that gives providers and lenders an indication of how likely you are to effectively manage and repay borrowed credit, such as a loan, credit card, or mortgage. This is often referred to as your ‘creditworthiness.’ The better your credit score, the more creditworthy you’ll be considered, and this will increase your chances of approval.
Your credit score will be determined by a number of factors, including how well you’ve repaid credit in the past, and your payment history in terms of your current bills.

Where can I check my credit score?

You can check your credit score through one of the three main Credit Reference Agencies (CRAs). They are:

• Experian;
• Equifax; and
• TransUnion.

Experian and Transunion, whereas Equifax charges a monthly fee after an initial 30-day free trial period.

Why is my credit score different on different sites?

When checking your credit score, you might notice that it differs across various sites. For example, your score might be considered as ‘good’ on one site, yet ‘excellent’ on another. This is because each CRA uses its own unique scoring system, which could result in discrepancies.
In addition to this, the CRAs are provided with data at different times, so scores may be generated based on outdated information.

What do I need a credit score for?

Your credit score will play a role in any of the following situations:

• Taking out a mortgage;
• Getting a car on finance; and
• Applying for a loan or credit card.

Lenders and providers will look closely at your credit score when deciding whether to approve your application to borrow money.

Why is it important to have a good credit score?

Having a good credit score could increase your chances of being approved to borrow credit. You may also find that you’re presented with more options and better rates of interest.

What causes bad credit?

A low credit score could be a result of several things, including:

• Late or missed repayments.
• Multiple hard searches being carried out on your credit file within a short timeframe.
• Declaring yourself as bankrupt, or being the subject of a County Court Judgement (CCJ) or Individual Voluntary Agreement (IVA).
• Being a victim of fraud or identity theft.
• Having a ‘thin’ credit file.

What's a 'thin' credit file?

A thin credit file is when you have little to no credit history available, and is often the case if you’ve never borrowed credit before.
While this isn’t necessarily a bad thing, it could reduce your chances of being accepted for borrowing, should you ever need to apply. With no evidence of how you’ve managed credit in the past, lenders may see you as a risk.

Getting approved for a loan with poor credit history, or no credit history at all

If you have a low credit score, or no credit history at all, you might be worried about your chances of being approved to take out a loan.
Having bad credit and no credit history don’t automatically mean that your application will be turned down. While your choices may be more limited compared to someone with a good credit score, there could still be options for you to consider.

Several UK lenders specialise in loans for people with imperfect credit history and thin credit files. These lenders are willing to consider applications from people with all credit scores – you’ll just need to make sure that you meet their eligibility criteria before you apply.

It’s worth bearing in mind that loans for people with poor or no credit history could come with high interest rates. Before you take out a loan, you should make sure that you can afford your monthly repayments, which will include interest.

Can you fix a bad credit score?

The good news is that a poor credit score can be improved, and there are numerous ways in which you can work towards a healthier credit position.

How to improve your credit score

• Pay your bills on time. This may seem like an obvious one, but did you know that making late repayments or missing them altogether can cause serious harm to your credit score? Setting up a direct debit could help you keep on top of payments.


• Register to vote. While this may not be something you automatically associate with your credit score, being on the electoral role can make it easier for potential lenders to verify you at your current address.


• Do you have a credit card? If so, be sure to stay within your credit limit, and make at least the minimum repayment amount each month. If your aim is to improve your credit score, you should try to clear your credit card balance in full, and keep your credit utilisation* low.


• Avoid using your credit card to withdraw money from cash machines. This is called a ‘cash advance,’ and lenders may view this as a sign of poor money management.


• When you apply for credit directly with a lender or provider, a hard credit search will be carried out, and will provide an insight into your financial history. Undergoing multiple hard searches within a short space of time could have a negative impact on your credit score. Try to limit the number of hard searches on your credit file.


• Check your credit report for any errors. It’s possible that something as easily rectified as a misspelled name could be affecting your credit score. If you spot something that doesn’t look right on your credit report, you should contact the CRA and bring it to their attention.


• Be mindful of joint accounts. Sharing a joint account, such as a mortgage, with someone who has poor credit history could have a negative impact on your own score.


• If you’re hoping to work on a thin credit file, a credit builder credit card might be something to consider. Use a credit builder credit card to make small purchases, and repay your balance in full. Your spending and repayment habits will be reported to the CRAs, and over time, you could notice an improvement in your score. These credit cards are best used alongside other credit building methods, such as those mentioned above.

*Your credit utilisation is the amount of money you borrow on your credit card, and is calculated as a percentage. The lower the percentage, the less money you’re spending on your credit card.

Worried about money? Help is always available

If you’re struggling with money and need some advice, please know that free, confidential support is readily available through a number of websites, including StepChange, MoneyHelper, Citizens Advice, and National Debtline.

When we’re feeling bogged down by finances, it can be tempting to keep our worries to ourselves, but this won’t solve the problem. You deserve to feel confident and in control of your money, and reaching out and asking for help is the first step towards this.

The information contained in this article is meant as a general guide and does not constitute or should be taken as advice.
October 2024.