How to improve credit score (UK credit) will depend on the individual in question and their outstanding debt.
In this article, we’re going to share information on what can be done to improve credit, what will hurt a credit score, and answer common questions we receive on the topic.
This article is part of our free series on banking in Europe, ranging from opening the best online bank account in Europe to managing your credit score in different countries.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- How to Improve Credit Score UK
- Good Credit vs Bad Credit
- Benefits of Having a Credit History
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
How to Improve Credit Score UK
How to improve a credit score in the UK will depend on each individual’s unique circ*mstances. Most importantly, the goal should be to reduce their credit utilization score to 30% (or as low as possible), pay down unsecured credit like credit cards (which report to credit agencies more frequently and never miss a credit payment.
Good Credit vs Bad Credit
The main difference between good credit and bad credit is that good credit indicates a consistent behavior of meeting repayment obligations over an extended period of time while bad credit indicates a consistent struggle with meeting repayment obligations over an extended period of time.
Not surprisingly, lenders want to lend to individuals with good credit instead of bad credit. Additionally, individuals with bad credit are considered higher risk and are therefore subjected to higher interest rates in order to offset the risk that borrowers undertake when lending to them.
Benefits of Having a Credit History
The benefits of having a good history include being able to access affordable credit in order to make important life purchases, including homes, cars, and even schooling. Additionally, a good credit score can reduce the interest rates that you are offered by lenders, can increase the products and services you can access from utility providers, and even provide access to a wider range of lenders and utility providers to choose from.
Here’s a look at some of the most common benefits that having a good credit score and history can provide.
Benefits of Having a Good Credit Score & History
- Access to unsecured financing (credit cards & lines of credit)
- Access to secured financing (mortgages)
- Lower interest rates
- Lower down payment
- A wider range of lenders to choose from
- More service providers to choose from
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Frequently Asked Questions
Below are a few of the most common questions we receive from people asking about how to improve credit scores in the UK. If you have further questions you would like answered, don’t hesitate to get in touch.
How Can I Fix My Credit Score Fast in the UK?
How you can fix your credit score fast in the UK will depend on the credit you have available to you, the funds you have set aside that you can use to pay down debt, and more. Importantly, you should not be doing anything to negatively impact your credit score during the period when you want to improve it. Likewise, you will want to reduce your credit utilization score (how much of your available debt you use) and pay down credit cards, which report to credit bureaus more frequently.
How Can I Raise My Credit Score in 30 Days?
Whether you can raise your credit score in 30 days will depend on where you are in the reporting cycle for certain credit providers, how much cash is freely available to you relative to your debt, and how much you want to raise your credit score. These factors will impact your ability to raise your credit score in 30 days or not.
If you do have available money and your credit issuers have yet to report to credit bureaus, you may be able to raise your credit score in 30 days. To do so, you will need to pay down outstanding credit card balances and ideally get your total credit usage vs available credit down to less than 30%. That said, it is not guaranteed that this will work and it is always better to plan for a long-term raise in your credit score by following more sustainable practices and good credit management.
How Can I Improve My Credit Score Fast?
How you can improve your credit score fast will depend on the resources available to you. In most cases, the best way to improve your credit score is to pay off any overdue balances. Then, reduce your total outstanding balances (reducing your credit utilization). It’s especially important to pay down credit cards as they report to credit bureaus on a more frequent (monthly basis) and can help to have an immediate impact on your credit score.
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