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How to improve your credit score

Written byKoyo Loans
First published9th June 2022
  • Check your record is correct 
  • Register on the electoral roll 
  • Pay your bills on time 
  • Don’t max out your current credit 
  • Avoid running hard checks on your credit file 
  • Keep your old accounts open 
  • Apply for a personal loan with Koyo Loans today 

If you’re hoping to borrow money in the near future, improving your credit score is a smart move. Below, we explain some simple steps you can take to improve your credit score, which could improve your chances of being approved for a personal loan.

We also explain how Koyo utilises Open Banking information, not just your credit score, to fairly assess your application for a personal loan. So, without further ado, here are six ways you can improve your credit score. 

Check your record is correct 

Credit bureaus aren’t perfect. Even a misspelt entry on your address can affect your credit score, so it’s very important to check your current entry to ensure that everything is accurate and up to date. The best way to correct a mistake on your record is to contact the credit bureau directly. You will need to submit your query in writing and provide documentation to support your claim.

Register on the electoral roll 

One of the simplest ways of improving your credit score is by registering on the electoral roll at your current address. This doesn’t mean you have to vote in the upcoming elections, but it does ensure that credit agencies know where you live. This is important as your current address may influence your chances of accessing credit. So, if you’ve recently moved house or are living in student halls, for instance, make sure you get on the electoral roll, so credit bureaus have up to date information regarding your address. 

Pay your bills on time 

Your ability to pay your bills on time says a lot about you as a potential borrower. If you regularly miss payments on your credit card or pay utility bills late each month, you will be seen as high risk by the credit bureaus. So, make sure you have the funds in place to make all of your payments on time every month. If you can show over time that you regularly meet your payments and still have money left over, it suggests to lenders that you’re a good candidate for credit. In other words, it will help to boost your credit score. 

Don’t max out your current credit 

Credit utilisation refers to the use of your current credit limit. For instance, if you have a limit of £5,000 and currently have debts of £4,000, your credit utilisation percentage is 80%. Although credit bureaus don’t disclose what a good percentage looks like, try and keep your credit utilisation below 30%, particularly where credit cards and overdrafts are concerned. Maxing out your current credit could be interpreted as a sign of desperation and won’t look good to potential lenders. 

Avoid running hard checks on your credit file 

When you’re hoping to borrow money, most lenders will run a check on your credit history. There are two types of checks they can run – hard or soft checks. Hard checks show up on your credit history, while soft checks don’t. If you have several hard checks on your credit file from various lenders in recent times, it’s a sign that you have been seeking credit from multiple sources. To avoid this blemish on your credit file, look for lenders that conduct soft checks. 

Keep your old accounts open 

Even if you don’t use them regularly, keeping your old bank accounts open is a good way of displaying a long credit history. This is because long-standing accounts are regarded as a sign that you’re a trusted borrower, and they work in your favour when you’re applying for credit. As such, unless you have a good reason, don’t shut inactive bank accounts if you’re hoping to improve your credit score.

Apply for a personal loan with Koyo Loans today 

At Koyo Loans, we utilise Open Banking to help us make an informed decision about whether or not to approve your credit application. While your credit score is still important, it’s not the only piece of the jigsaw. Open Banking lenders like Koyo are more interested in your real-life financial circumstances, which paint a much clearer picture of your suitability for a personal loan than just a score given by a credit bureau. Use our loan calculator today to see how much you could borrow. 24.9% APR Representative. 

Koyo Loans is the trading name of BETR Technology Ltd. Company No. 11483187. Registered Office: Huckletree Soho, Ingestre Court, Ingestre Place, London, W1f 0JL

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