How to increase your credit score


How to increase your credit score

Having a good credit history opens up doors to better rates on credit cards, loans and, crucially, mortgages.

But building it does take time, and sometimes you may have taken a step back if you’ve made mistakes in the past.

Well, we’re here to offer you some tips on how you can boost your credit score. Whether yours is damaged, you’ve never borrowed before and you’re starting from scratch, or you just want to improve an average score, try taking these steps below.

Get signed up to vote

Right, first things first, if you’re not yet signed up to vote, what are you waiting for?

This is the quickest and easiest way to improve your credit history, so make sure you’re signed up if you’re not already.

When you apply for credit, the lender wants to check you are who you say you are and that you live where you say you do. Being signed up to the electoral roll helps them to do this.

Head here to sign up.

Take it easy

Now, if you’ve been applying for loans or credit cards but you keep getting turned away, it’s time to stop.

Every application you make – it doesn’t matter if you’re accepted or not – is marked on your credit history. The lender you apply to carries out what is called a hard search, and future lenders can see this mark when you apply for credit.

So even if you’re turned away, the mark stays there.

If you’re turned away a few times, other lenders might see this as a sign that you’re desperate for credit. This may make them less likely to say yes to you.

Instead, you could find out if you’re eligible for credit before you apply with an eligibility calculator.

These tools carry out a soft search, which leaves a mark on your credit history that only you and the credit reference agencies can see. Future lenders won’t be able to see them.

With Ocean, you could find out whether you’ll be accepted for the Ocean Credit Card* (34.9% APR representative (variable)) before you apply with our QuickCheck tool. And, our Smart Search lets you check whether you’ll be accepted for a homeowner loan before you apply.

Make sure you’re paying everything on time

To keep your credit history in good shape, it’s really important that you stay on top of all your payments.

If you’ve got a credit card, loan or mortgage you’re making payments on, you must remember to make your payments to these on time each month. You can set up a Direct Debit so the money comes out automatically every month.

It’s not just missing payments on credit that can affect your credit history, either. Other outgoings like your mobile phone contract and even utility bills could all have an impact if you miss payments.

But if you’re renting at the moment and you’re good at paying your rent on time, you might actually be able to improve your credit history just by paying your rent. You can find out more about this here.

Cancel old cards… But maybe not all of them

This one can be a bit more complicated than the others.

If you have old credit cards you don’t use anymore, generally it’s best to close them.

This is because, when you apply for new credit, your lender can see that you have other credit cards open that you could spend on. So in theory, you could actually go out and spend to your limit on all of these old cards and then be overwhelmed with the repayments. This means your new borrowing might take a backseat or you might not be able to afford it at all.

Lenders don’t want to take that risk, so they might refuse your application because of this.

Unfortunately it’s not all that clear-cut.

You might want to keep one of your old credit cards – perhaps one with a higher credit limit – open to show that you’ve been trusted with a high limit by a different lender.

They’ll want to see that it’s active, so you could spend a tiny amount each month and set up a Direct Debit to clear the balance in full. That way, they’ll be able to see other lenders trust you with a higher limit.

Keep in mind that every lender is different, and it all comes down to their individual lending terms. These are tips to guide you, but managing credit well is what will get you the furthest.

Consider borrowing

You might not know this, but the best way to improve your credit score is to actually take on credit.

The thing is, lenders want to see that you’re a trustworthy borrower, so someone who can borrow money and repay it on time every month is a reliable borrower in their eyes.

You may not have a poor credit history; you might simply have never borrowed before. If this is the case, you could consider taking out a credit builder credit card to help build your credit score.

A credit card is generally one of the first steps to building yourself a credit history. You don’t have to spend a lot on it, just simply making one or two small purchases a month and repaying your balance in full will help to start you on the path to improving your credit history.

The Ocean Credit Card could help you to rebuild your credit history if it’s damaged – so long as you make at least your minimum payment every month and stay within your credit limit. If you don’t, your credit history could be damaged further.

An added bonus of clearing your balance in full each month means you don’t have to pay a penny in interest, either!

Your score isn’t the be-all and end-all

Remember, while it can be useful to track your credit score to see how you’re improving month on month, it’s not what lenders see when you apply for credit.

They’ll just see your history of managing credit in the past and will give you a unique credit score based on their own calculations.

That’s why there’s no such thing as a “universal credit score”, and why one credit reference agency will give you a totally different credit score to another.


*Intelligent Lending Ltd (credit broker). Capital One is the exclusive lender.