How can I improve my credit report?

Harriet Meyer / 20 April 2015 ( 14 November 2017 )

If you ever want to borrow money, whether a mortgage, loan or credit card, your credit report will be key to deciding whether your application is accepted. Harriet Meyer shares six things that you can do to improve your credit report.

If you ever want to borrow money, whether a mortgage, loan or credit card, your credit report  will be key to deciding whether your application is accepted.

When you apply for credit, the lender will use your credit report, along with information from your application form and anything they know about you already (if you are an existing customer) to calculate a credit score. This will help them to decide whether or not to accept your application.

What is a credit report?

Each lender uses their own criteria, so you could find that one lender will accept you but another could decline you, based on the same information.

Fortunately, there are several ways you can boost your score and avoid any problems ruining your chances of borrowing in the future. 

Here are five simple tips:

1.    Pay your debts on time

The simplest way to improve your credit report is to make sure you're paying off your debts. Pay at least the minimum payment amount every month and ensure that your payments are on time. 

If you manage your debts well, it shows that you are able to borrow money and pay it back. Late and missing payments are recorded on your credit report and indicate that you are an unreliable payer, which will make lenders see you as a risk. 

How to clear your debts

2.    Register on the electoral register

Making sure your name is on the Electoral Roll at your current address will help significantly, and is an important step to take before you apply for any credit under a new address. This is because lenders use the Electoral Register information to help them prove you are who you say you are.

3.    Consider cancelling unused cards

Part of the process a lender goes through when assessing whether to lend you money is to look at how much credit you have available. This will include credit card limits, overdrafts and loans. 

While it may be beneficial to have some record of borrowing and repaying debt, having large amounts of unused credit available to you may make lenders reluctant to give you even more credit.

How to cancel a credit card

4.    Regularly check your credit report for errors

You can check your credit report using one of the three main Credit Reference Agencies in the  UK  - Experian, Callcredit and Equifax. You can get hold of a one-off copy for just £2, or subscribe to a monthly membership.

It’s worth checking your record for any errors regularly, and definitely before applying for credit. Go through this carefully to make sure it’s accurate, including previous address details and spelling. There is a chance that your information varies between the three agencies, so it is worth contacting each one.

It is possible that there could be mistakes on your credit report that you need to correct. If you find an error, contact the lender that put the information on your credit report and ask them to correct it.

If they refuse, you can ask the credit reference agencies to raise a dispute with the lender for you to ask for it to be amended. You can also put a note on your credit report to explain the circumstances around the incorrect entry, for example if you missed a payment because you were ill or unable to work.

Top five mistakes that damage your credit report

5.    Consider getting a credit card

Taking out credit may seem an odd way to improve your credit report, but it helps show lenders that you are a reliable borrower. 

If you have very little credit history, for example, getting a card and managing it sensibly can help to improve your credit report. This means only spending what you can afford on the card and paying off the balance in full and on time every month.

Credit card mistakes you can avoid

6.    Spread out applications for credit

Every time you apply for credit, the lender will check your credit report. This will leave a 'footprint' - a sign that a credit check has taken place – which other lenders can see. 

So if you apply for lots of credit cards or loans at the same time you run the risk of appearing desperate for cash, and this could work against you in the future.

How to clear your debt

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.