Steps to take to improve your credit score

Why is it important to improve your credit score?

It makes sense to keep an eye on your credit rating, even if you’re not thinking of borrowing money. Your credit score affects many different areas of your life, from mortgages, to mobile phone contracts to car repayments.

If you have ongoing debts, or even if you have no debt at all, this could mean you have a low credit score. Your credit report could then hold you back from getting the best deals on things like credit cards, or even being turned down completely for a loan.

If you’re worried about your finances due to the rising cost of living, it’s a good idea to take control of your credit rating sooner rather than later.

How is your credit score calculated?

Lenders use credit reference agencies to get details of your credit rating. Credit reference agencies use lots of data about you and your spending habits to give you a credit score. This is based on information like:

  • Your past spending habits
  • Any bills or accounts in arrears
  • If you have faced bankruptcy or have CCJs against you
  • How long you’ve had any other credit cards or loans

You can do a credit score check on yourself online with Experian, TransUnion or Equifax to see how likely you are to get credit.

How can improving your credit score benefit you?

Having a good credit score can help you manage your money more effectively, and benefit from the best rates. You’ll need a good credit rating to be approved for most credit cards.

The higher your credit score, the more likely you are to be offered a higher credit limit. It shows lenders that you can be responsible with your money. Having a low credit score makes you more likely to be only offered high interest rates on any credit cards.

Compare our M&S Credit Cards.

How long does it take to improve your credit score?

Because there are so many factors involved in building your credit report, it can take a long time to make changes. It’s a good idea to regularly check in to see how your credit rating is doing, so you can take steps to improve your credit score if needed.

Our credit score page has more detail on how to check your credit score.

Tips to increase your credit score

Credit reference agencies want to see that you are able to manage your money well. Setting up a budget using a planner will help you stay on top of repayments and make sure you don’t fall into arrears on things like council tax or bills. This can mean your credit score goes down.

Be aware that making an application for credit will show up on your credit file. Too many applications in a short period could actually lower your credit score.

It might seem strange, but having credit cards you don’t use or with no balance could also harm your credit score. By showing you can manage your credit limit, you could actually help your credit score.

Our support pages have more information about how to use your credit card.

Published August 2023