April 14, 2025
Improving Your Credit Score – 10 Tips Explained
By : Ellie Brown
A bad credit situation is a big obstacle to financial progress. Fortunately, there are many ways to improve credit scores. Let’s discuss about 10 such ways in which you can improve your credit rating a lot. Also, if you follow self-discipline in your financial life, you can easily convert your poor credit rating into a good credit score.
Let us know which ways you can raise your credit rating.
1. Check your credit report regularly
You have to check your credit report on a regular basis to spot any possible mistakes. Sometimes, there are some mistakes in the credit report that cause your credit score to go down. You can request your credit report from any credit reference agency like Experian, Equifax, or Trans Union.
You can get a free report annually from all three credit reference agencies. After checking the report, check all types of errors. These can be incorrect account balances, late payment of a bill that you paid on time, accounts that you never opened, etc. By supporting these errors, you get them rectified. By getting these mistakes corrected, you get an instant boost in your credit score.
2. Reduce credit card balances
Your credit card usage also affects your credit score. If your credit utilization ratio is high, then your credit rating falls rapidly. According to financial experts, you should keep your credit utilization ratio below 30%. For example, if your credit limit is 10,000 pounds and your current balance is 5000, it means you have used up to 50% of your credit limit.
This can drastically hurt your credit score. Therefore, try to pay off high balances and make full payments on your credit card every month. Do not let your credit utilization ratio exceed 30%. By doing this, you will see improvements in credit rating.
3. Pay your bills on time
Needless to say, pending bills and debt payments have the biggest impact on your credit score. So, always pay all your bills and other financial commitments on time. Your payment history affects 35% of your credit score. Late payments or skipped payments significantly affect your credit score. To make payments on time, activate auto debit, set up calendar reminders, or ask your credit card company to send you email or text alerts.
If you follow these small tips, there will be no missed payments. If you have already skipped payments, start paying them off on time from today itself. Pay pending dues and make future payments on time.
4. Avoid opening too many new accounts
If you open new accounts at the same time, like applying for a new credit card or loan, your credit score is negatively affected. This happens because whenever you apply for any financial product, a hard credit search is done on your financial records.
These search footprints appear on your credit report, which brings down your credit score. If you have applied for just one loan, then it does not have much impact. But if you apply for multiple loans or credit cards or financial products at the same time, your credit score goes down. This is due to multiple hard credit checks on the credit report. Therefore, never open new accounts at the same time.
5. Don’t close old accounts.
The length of your credit history also plays an important role in your credit score. The credit history accounts for up to 15% of your overall credit score. So don’t close old credit accounts. You may use them occasionally but don’t close them completely. For example, if you close an old credit card account, it will increase your credit utilization rate.
Your available credit limit will also increase. But this will remove an important part of your long-standing credit history. So, instead of closing old accounts, you can use them for small purchases and repay on time. Closing old accounts reduces the length of your credit history, which brings down your credit score.
6. Become an authorized user
This is a popular way to improve credit rating. If you have a credit card holder in your family and friends with a good credit score, you can become an authorized user of their credit card. By becoming their authorized user, you can improve your credit score through credit card repayments. This means that whether they use their credit card or you use their credit card, making timely payments will improve your credit score as well.
However, for this, it is important that the primary cardholder has a good credit rating. It is also important to ensure that the primary cardholder keeps paying the pending payments on time. In that case, you can easily improve your credit rating without much effort.
7. Negotiate with creditors
Sometimes, financial circumstances are such that you are not able to pay your bills on time even if you don’t want to. Therefore, if you have some pending dues or bill payments, talk to your creditors. They can help you settle the dues by discussing a new payment plan.
In some cases, creditors are also ready to remove negative marks from your credit report. This is done through a ‘pay for delete’ agreement. However, make sure that you enter into any such agreement with the creditor in writing. In such a case, the creditor will have a legal obligation to remove the negative marking from your credit report.
8. Use a secured credit card to rebuild your credit
You can also improve your credit score very quickly by using a secured credit card. For this type of credit card, you have to give a specific amount of cash upfront as collateral. This cash deposit works as your collateral. You get a credit card with a credit limit equal to this. Use this card responsibly.
Make small purchases and pay installments on time. By doing this, your poor credit rating will gradually improve. This is a popular method. However, for this, you need cash to pledge. If you pay your installments on time, you can receive that deposited cashback in your bank account.
9. Diversify credit mix
A credit mix is a combination of different financial products that appear on your financial records. For example, credit cards, car loans, mortgages, medical loans, student loans, etc. Having a combination of different credit types can help you improve your score quickly. However, don’t take a loan just to improve your credit mix. Apply only for a loan that you can handle responsibly and that you genuinely need.
If the credit mix shows one loan type too many times on your financial records, it can upset the balance of your credit mix. This can lower your credit rating. For example, if personal loans are showing multiple times in your finances, it shows your financial irresponsibility. But if you keep a mix of different loan products, it reflects your strong repayment capacity and responsible financial behaviour.
10. Be patient and consistent
If you have been struggling with a poor credit situation for a long time, you will have to make constant efforts. This requires patience the most. Your credit rating will not improve overnight. For this, you will have to make regular efforts for several months. Pay your bills on time, keep your credit utilization rate low, and avoid applying for unnecessary loans. If your credit score rise is slow, do not stop your efforts.
By following positive financial habits and avoiding past mistakes, you can easily build a stronger credit profile over time. Many times, after going through a bad financial situation, it takes several years to improve your credit score. For example, after getting into the worst credit situation, mostly due to bankruptcy, it takes years to improve your credit score. In that case, you have to make constant efforts while being patient. With time, you will see improvements in your financial situation; just follow that and keep going.
Conclusion
Practice all the suggestions given above. They will help you bring better changes to your financial life. All these are tried and tested methods. By working on them, you can improve your credit rating quickly. If you are also struggling with a poor credit situation, start working on your personal finances today without delay. Following the necessary precautions is also needed. For example, as long as you are not sure about taking a loan from a specific lender, only apply for loans with soft credit checks. These queries leave a search footprint and only offer loan quotes to let you know the approximate cost of a loan.