How to improve your credit score

There are simple things you can do to improve your credit score. Even if you’ve never been turned down for a loan, you could be missing out on the best deals.

More than half of us don't know our credit score, according to market researcher YouGov. Given that your credit rating can decide whether you are approved for a mortgage or loan, what interest rate you pay on your credit card and whether you can get your pick of current accounts, it's surprising so many of us have never looked at it.

The big three credit-rating agencies Experian, Equifax and TransUnion hold data on 50 million British adults. "These companies can see into our financial souls," says the Financial Times. "They can use our borrowing history including any past mistakes to predict how likely we are to repay in the future."

A bad credit rating can mean you are rejected from mainstream credit deals. So you won't be able to get those mortgages, loans and credit cards that you see in the best-buy tables. But it isn't as simple as having a good or a bad credit score: there are many categories between the two that can affect your finances. For example, have you ever applied for an interest-free credit card only to find you are accepted, but offered a shorter 0% period than advertised, or your credit card has a higher interest rate than was advertised? This is a sign that your credit rating isn't bad, but it also isn't good. Lenders reserve their best deals for people with top credit scores.

If you've never checked your credit score because you've never been rejected, you could still improve your finances by taking a look and seeing what you can do to boost your score. Check your rating for free with ClearScore or by using checkmyfile.com's 30-day free trial.

Simple steps to take

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.