Understanding and improving your Credit Rating

Have you tried getting important items on credit and were denied? Or are you simply looking to apply for credit products like phone contracts, car finance etc? Either way, you’re interested in understanding and improving your credit rating in order to maintain a healthy credit file. 

In order to improve your credit score, first, you must understand your credit score. Your score can vary depending on the credit reference agency you go to. In the United Kingdom there are a few agencies that provide credit scores for free with optional paid features.  

The companies that will help you understand your credit score in the UK are: Experian, Clear Score and Money Supermarket. 

Understanding what you see on file

Looking at your credit score may be disheartening, but there are ways to improve it. The best way is by understanding what you’ll see on when you log into their reference agencies app or website.  

The Score 

Each credit agency’s score varies; however, they are usually out of 1000 and are broken down into a couple of categories. Certain providers even tell you what the average score for your local area and the UK are. During the time of writing this article, the average score in the UK is 585/1000. 


The accounts section of your credit file lists current and other accounts that are in your name, such as credit accounts from credit providers like Argos and John Lewis.  


The offers section usually lists preapproved credit cards from different providers. This is how a lot of reference agencies make extra revenue. We’d advise you to be careful with taking out additional credit cards unless you can afford them. The credit cards offered there are often a higher % APR. 

4 Tips to Improve your Credit Score 

Improving your credit score should be a high priority for everyone. Did you know that in some cases, people with high credit scores can be denied credit too? It’s just less likely to happen when you’ve got a good credit score.  

Let’s get right into it: 

1. Get on the Electoral Roll

Credit providers love to know who you are and where you have been for the last few years. Registering on the electoral roll will allow these providers access to your information to confirm your name, address, and residential history. 

N.B: It’s also actually against the law not to register to vote! You could technically be fined up to £1,000 for not doing so. 

2. Check your credit file

Though this may seem like the obvious choice, it would be best to check your credit file before you apply for any credit. There could be information on there that isn’t updated and might in turn affect your credit application. For instance, a previous credit provider hasn’t updated your records and shows you’re still in debt. In such a scenario, it’s then advised to contact the provider and get them to update your records. 

3.  Pay off your debts

Don’t settle for paying just the minimum amount each month; try your best to pay more than that amount as this signifies good behaviour to a prospective lender. It tells them you are managing your debt well and can be trusted with more credit products in the future. 

You should set up a direct debit so that you stay on top of your payments as well as pay above the minimum amount. 

If you’re in debt we’d recommend you start by slowly chipping away at your biggest piece of debt. This could be the biggest monetary amount or the one accruing the biggest amount of interest. 

4. Apply for Credit you’d likely to be accepted for

It’s important to apply for credit products so that you’d have a strong chance of being approved. For instance, if you are declined a credit card, don’t try to apply for a dozen credit providers in the hope that at least one will accept your application. 

It will reduce your credit rating and you might end up being declined by all the credit providers 

For this reason, it’s best to do a bit of research before you apply for credit. Using a free service like Clear Score, you’ll be able to see the range of credit products and the probability of you being successful with your credit applications. You can also use Clear Score to check your credit score for free. 

What is a low credit score? 

There are multiple scores that could be considered a bad or low credit scores. Credit scores are not a one size fits all solution with a one size fits all approach. One person’s low credit score could be considered ‘ok’ depending on where they’ve come from.  

For more debt advice and money saving tips, connect with us on Facebook | Twitter