In our last blog ‘What affects my credit score?’ we explained the factors that could potentially damage your credit score. Those included debt amount, credit history duration and credit application timeframes. The next step is to help improve your credit score.
How can I improve my credit score?
There are steps you can begin taking now to increase your credit score so you can access valuable financial services and look forward to a more positive economic future..jpg?width=250&height=164&name=BMCS%20Blog%20Ad%20(1).jpg)
Did you know that in the UK, over 85% of card transactions are on Debit cards1 and only 35% of cards issued are credit cards2. That’s a lot of people managing their money responsibly, but who perversely may find they have a mediocre credit score, since they haven’t taken out credit. The good news is, it is still possible to build credit without owning a credit card
Here are several good ways to make improvements:
- Check that your address history is accurate - Let CRAs know if information on your credit report is wrong, such as personal information or accounts that don’t belong to you. This is important because, although it may seem like superfluous information, such data does make a viable difference to your credit score. Your creditworthiness could be negatively impacted on these grounds.
- Register to vote - This one may truly feel unrelated, but surprisingly enough, whether you’re registered to vote can impact your credit score. If you are registered to vote, then the likelihood is that your credit score will increase. It’s a simple fix that could help you out greatly.
- Ask to remove any old financial connections - The credit scores of the people with whom you share joint accounts can impact your own. If you share an account with an old housemate who has a poor credit score, for example, by association your own score might be dragged down. So, it’s best to sever these old financial connections.
- Never miss a payment - This tip is an important one – missed payments, defaults and CCJs (county court judgements) leave a mark on your credit file for six years, so this is something to avoid. Although, if this has happened to you with good reason, you can appeal it by raising a notice of correction to give an explanation to a bank or lender. As of 2022, a survey conducted by Review42 revealed that 43% of people in the UK have missed a credit payment.
- Pay off your debts - This may be difficult, but your credit score improvement will be well worth it. Debts are also stressful, so the sooner you can get these under control, the sooner you’ll feel an improvement in your mental wellbeing in addition to seeing an improvement in your creditworthiness.
Credit cards aren’t designed to help build your credit score; in some ways, the opposite can be true. Credit card companies make money when their customers don’t pay off their balances at the end of each month. So the more their customers spend and the less they pay off, the more money the credit card provider makes.
How long does it take to improve your credit score?
Most people looking to improve their credit score are looking to do so as quickly. However, improving your credit score is a gradual process so don’t be disheartened if it doesn’t happen overnight.
The only definite means of obtaining sooner results is simply to start making changes sooner. It not only takes time for you yourself to implement these changes, but it also takes time for the changes to be reflected in your credit score. The improvement may not be immediate, but it will certainly happen.
We know it can be a long road, but there's an easy way to kickstart this journey. Your trusted bank account is a sensible place to start building your credit score. By using a BuildMyCreditScore debit card that's connected to that account, you can build your credit score simply, one small purchase at a time.
1Payments UK. Jan-Aug 2022
2RBR Analysis 2022