Your credit history is a record of how you have handled bills and borrowing. Lenders, mobile networks, landlords and some energy suppliers look at it to decide whether to offer you a deal and on what terms. If your history is short or patchy, you may find it harder to get accepted, even if you have never missed a payment in your life.
Building a good record takes time, and there are no shortcuts that really work. The steps below are the ones that make a lasting difference.
Step 1: Get on the electoral roll
Lenders use the electoral register to confirm your name and address, so being on it is one of the simplest ways to strengthen your file. You can register to vote on GOV.UK in a few minutes. Remember to update it whenever you move.
If you are not eligible to vote, the credit reference agencies can explain other ways to confirm your address, so it is worth contacting them.
Step 2: Pay every bill on time
Your payment history matters more than anything else. Late and missed payments can stay on your file for six years, so the habit of paying on time is worth protecting.
- Set up direct debits for at least the minimum payment on any card or loan.
- Line up payment dates with when you get paid.
- If you know you will struggle with a payment, speak to the company before it is due rather than after.
Step 3: Use a small amount of credit and use it well
Lenders like to see that you can borrow and repay reliably. If you have no credit at all, they have nothing to go on. A mobile phone contract or a credit card used carefully can help you build a track record.
Some credit cards are designed for people with little or no history. They usually come with a low limit and a high interest rate, so interest can build quickly if the balance is not cleared in full each month. Some people put one small regular cost on the card, such as a streaming subscription, and pay it off by direct debit.
Keeping your balance well below your limit also tends to help. Using most of your available credit, month after month, can suggest you are relying on it.
Step 4: Check your credit report regularly
There are three main credit reference agencies in the UK: Equifax, Experian and TransUnion. Each holds its own file on you, and lenders may use one or more of them. You have a legal right to see your statutory credit report free of charge from each agency.
When you check, look for:
- Accounts you do not recognise, which could be a sign of fraud.
- Payments marked late that you made on time.
- Old addresses or links to people you no longer share finances with.
You can ask the agency to correct mistakes. If you shared a joint account with an ex-partner and your finances are now separate, you can ask for a notice of disassociation. You can also add a short notice of correction to explain a past problem, such as missed payments during an illness.
Step 5: Space out your credit applications
Each full application usually leaves a hard search on your file, which other lenders can see. Several in a short time can make it look as though you are desperate for credit. Eligibility checkers that run a soft search do not affect your score. Our guide to what affects your credit score explains this in more detail.
Step 6: Be patient, and be wary of quick fixes
Any company that promises to repair your credit rating quickly for a fee should be treated with caution, and lenders offering credit with no checks at all are a warning sign, as we explain in our article on why lenders that skip credit checks are a red flag.
If you need to borrow while your history is still developing, some lenders look beyond your score. At Logbook Money, our decision is based on your vehicle's value and what you can afford, and we consider people with bad credit. Taking out a loan just to improve your credit history is not a good idea, though. A logbook loan is secured on your vehicle, it is a costly way to borrow and missing repayments can make your credit file worse. This article is general information, not financial advice. If debts are already a problem, free advice from StepChange or MoneyHelper is a better first step.
Your car may be repossessed if you do not keep up repayments on a loan secured against it.
