Building a better credit score doesn’t happen overnight, but with the right steps, it’s absolutely possible.
Whether you’re just starting your credit journey or trying to recover from past credit mistakes, it is possible to improve your score over time. In this guide, we break down how to increase your credit score with strategies you can apply in the short, medium, and long term.
HOW TO BUILD A BETTER CREDIT SCORE: STEP BY STEP, SEASON BY SEASON.
In the short term (0-3 months)
Start by paying every bill on time. Your payment history is the biggest factor affecting your credit score. Missing just one payment can hurt your score, while paying consistently (even if it’s just the minimum) builds trust with credit providers.
Reduce your credit balances. If you’re using more than 50% (20% is ideal) of your available credit (like credit cards or overdrafts), try to bring that down. Credit providers want to see that you’re not relying too heavily on credit, so paying down balances, even just a little, can make a difference.
Check your credit report. You get an unlimited number of reports, for free, from us at Finance365. Look for errors, duplicate listings, or accounts you don’t recognise. Don’t wait to dispute any inaccuracies because they could be pulling your score down unnecessarily.
In the medium term (3-12 months)
Limit new credit applications. Each time you apply for credit, a hard enquiry is recorded, which can lower your score temporarily. If you apply for several accounts in a short time, it could signal financial distress. Rather, space out applications and only apply when necessary.
Build a healthy credit mix. If you only have one kind of credit (like a store account), consider adding a small personal loan or credit card that you can manage responsibly. This shows you can handle different types of debt, which can improve your score over time.
Stick to your repayment plan. If you’re paying off debt through a structured plan, stick with it. Credit providers reward stability. Even if progress feels slow, every on-time payment helps improve your financial track record.
In the long term (12+ months)
Keep old accounts open. The longer your credit history, the better. If you’ve paid off an account you no longer use, consider keeping it open (especially if it has no annual fee). A long, stable credit history gives your credit score a long-term boost.
Avoid major debt problems like judgments or defaults. These stay on your credit profile for years, even after you’ve settled the debt. Preventing black marks by staying within your means is one of the best long-term strategies for protecting your score.
Build financial resilience. Ultimately, a good credit score is a side effect of good financial habits. Budgeting and saving for emergencies, as well as avoiding unnecessary debt, all contribute to a stronger financial future.
Time is one of your greatest allies when it comes to knowing how to increase your credit score and putting this into practice. By far the most powerful thing you can do is stay consistent. Credit scores reward the combination of unwavering attention and disciplined action, so stay the course because your efforts can certainly pay off in the form of your long-term financial well-being.
It’s easy to take the next step. Check your credit score now! We’ll send you free alerts to stay on top of any changes in your profile.
You may be planning a big purchase for your home or even moving to a new home. No matter what you’re planning for as you work towards reaching your dreams, Finance365’s unlimited “soft” credit checks won’t impact your score and can help you reach your goals faster.
Improving your credit score starts here. Take control with Finance365 as you journey to the future you’ve always wanted.
