10 min read

How to take control of your credit score

Hannah Salih
18 January 2018

Whatever shape your credit score is in, or whatever your credit history, there's never a bad time to start taking the steps to improve.

If you're like most Brits, you may have set yourself a few goals for the year. Perhaps you want to get on the property ladder, buy a new car or make some home improvements.

Whatever your financial goals, working on your credit score is one of the best things you can do to bring them closer to reality. Here’s what you can do right away, what you can keep doing throughout the year and some tips to arm you for the future. Remember, it doesn't matter where you start, just taking the steps to improve your situation is a step in the right direction.

1. Check your credit report is accurate and up-to-date

This first step is something you can do right away. If there are any errors on your credit report, then your credit score may also be inaccurate. This could mean your score is lower than it should be.

Check whether your personal details such as your name, address and financial associations are all correct and up to date. You should also check all your accounts have been listed on your report and that your payment history is showing correctly. It's worth bearing in mind that it can take up to 6 weeks for your report to be updated. If there’s anything missing or incorrect you can contact Equifax directly. It's worth checking for any errors on your report with Experian and Callcredit (the other two Credit Reference agencies in the UK) as they may hold slightly different information on you. We have a full list of things to check on your credit report if you want to find out more.

Keep on top of your credit score and report for free with ClearScore

2. Keep an eye out for potential signs of fraud

While you should always keep an eye out for fraud, it's particularly important to do in January. Fraudsters can use stolen personal information to buy financial products in your name - and this kind of behaviour tends to reach a peak at Christmas.

Check your credit report to see if there are any hard searches or credit accounts you don’t recognise. This may indicate someone’s been applying for credit in your name. If you think someone is taking out credit fraudulently in your name you should contact the named lender and file a report with the National Fraud and Cyber Crime Reporting Centre.

3. Go over your accounts

Set aside an hour to go over all the accounts you have (any credit cards, store cards, loans and current accounts) - you can do this by logging in to your bank or lender's online service. Here's what you should be checking:

  • All your direct debits are set up correctly. It’s worth just double checking that the dates of your direct debits are correct and that the money is coming out of and going into the right accounts.

  • Your name and address are the same on all accounts. If your accounts aren’t all registered at exactly the same address, then it can cause errors on your report. So, make sure that your name and address are spelt correctly and are in the same format across all your accounts. E.G. If you live at flat 28a, it shouldn’t be ‘28 Flat A’ on some accounts. If you're Benjamin Jones on one account, make sure you are 'Benjamin' not 'Ben' across them all.

  • What your credit balance looks like. It's worth getting a really clear idea of how much debt you have left to clear, what monthly payments you are making and when you're likely to pay off that bill.

4. Revisit any credit you've taken out

Double check that you're on top of all the requirements by:

  • Reviewing the Ts & Cs

    If you’ve taken out a 0% purchase credit card, make sure you understand when the 0% offer ends, and mark it in your diary. Any balance still outstanding when the interest-free period expires will collect interest.

    Similarly, any 0% in-store finance (where you pay in monthly instalments) is usually only interest-free if you clear the debt within the agreed time, and interest and late payment charges will apply to missed payments. Make sure you know when these need to be paid.

  • Sorting out your payments

    If you’ve taken out a new credit card but you haven’t sorted out any payment system yet, now’s a good time to start. It’s usually a good idea to choose the “repayment in full” option, as making only the minimum repayment on your balance each month will mean you’re hit with interest on whatever remains.

5. Continue to build healthy credit habits

You can't change what's already happened so try to focus on the future. But it's worth just bearing in mind that your credit score isn’t going to shoot up just because it's a new year, but by continuing to take steps to improve your score over time, you can help make sure your credit score is in an even better place in a few months.

  • Use credit little and often

    Proving to lenders that you can use credit responsibly, and that you are reliable when it comes to repaying, is one of the best ways to boost your score. If you can't get credit, try to get your name on an energy or mobile phone bill instead.

    But make sure you’re always paying your bills on time and paying at least the minimum amount. Late or missed payments can have a negative impact on your score.

  • Keep your credit utilisation in check

    If you always max out all your credit cards, lenders might see this as a sign you are too reliant on credit. To help keep your score healthy, try to keep your credit usage below 50% of your total available credit limit.

  • Try out a Coaching plan

    If you want to make your credit score even better, try our free Coaching plans. You’ll get tailored tips and a handy to-do list to help you improve your score.

6. Plan ahead for any future credit applications

Once you're score is in a good place, you could be in a better position to apply for the credit that will help you achieve those goals. But before you rush off to the lender's office, it's worth taking the time to get organised. This will help make sure you get the credit you want at the best rate. Here's how to get future-ready:

  • Get an idea of when you'll be wanting credit

    Multiple applications for credit in a short space of time can harm your credit score. By planning ahead you can space out your applications and minimise the impact on your score.

    • Make sure you know when any offer periods end this year

    This includes any 0% or low interest credit cards, introductory fixed rate mortgage offers and even your energy plan. If you know when these offers are due to come to an end you can start shopping around for a better deal before you switch onto a more expensive rate.

  • Pay down your debts

    Paying down your debts is particularly important if you’re looking to get a mortgage in 2018. Think about clearing as much outstanding debt as possible and cutting down your outgoings, in advance of applying for a mortgage to help boost your chances of acceptance.

7. Don’t let applications for credit wreck your credit score

When you apply for credit a hard search gets carried out by the lender. This can cause your score to drop a little, but by using your card responsibly it will usually go back up (and beyond). You can’t avoid this if you want to take credit out, but there are a few things you can do to minimise the impact:

  • Check your eligibility before you apply. An eligibility checker shows you how likely you are to be accepted for credit before you apply, without damaging your credit score. This means you can avoid applying for products you're unlikely to get. (Top tip: you can do this straight in your ClearScore, making it really easy to compare different products.)

  • Don’t apply for too much credit at once. Multiple applications for credit in a short space of time can damage your score because it can make it look like you are desperate for credit. So make sure you spread them out.

By following these steps you'll be well on your way to making sure this is the year you really take control of your credit score.

by Hannah Salih

Hannah reads all the finance info on the web so you don't have to. She also spends a disproportionate amount of time responding to Moose and Flearoy's fan mail.

ClearScore exists to make your finances simple.
We offer a free service where you can handle everything to do with credit in one place. In your ClearScore account, you can see your credit score and the full details of your credit report. Your credit cards, mortgages, mobile phone contracts, loans, overdrafts and utilities all on the record. Our goal is to make ClearScore as simple, calm and straightforward as possible. Money is stressful enough.