How to improve your credit score, and why lenders do not see your number

Your credit file is the record lenders use to decide whether to lend to you and at what rate. The score you see in an app is a guide to that file, not the number lenders use. This guide covers how to check all three agencies for free, the changes that make the biggest difference, and how to correct mistakes.

Why the number you see is not what lenders see

Each agency produces its own score on its own scale, and none of them is the score a lender uses. Lenders take the raw data from one or more agencies, combine it with your application form and their own records, and run it through their own model. A bank lending for a mortgage weighs things differently from a card issuer. So a "good" score at one agency does not guarantee acceptance, and a "poor" one does not guarantee rejection. Treat the score as a health check and focus on the underlying file.

Check all three for free

You have a legal right to see your statutory credit report from each agency at no cost. Each also offers a free ongoing service, and several third-party apps show one or two agencies' data for free. Check all three because lenders do not all use the same one, and an error might sit on only one file.

Electoral roll

Being registered to vote at your current address is one of the simplest ways to strengthen a file. Lenders use it to confirm your identity and address. Registering takes a few minutes at gov.uk/register-to-vote, and it can take a month or two to show on your file.

Utilisation

Utilisation is how much of your available credit you are using. Someone with £5,000 of limits and a £4,500 balance looks stretched. Someone with the same limits and a £1,000 balance looks comfortable. Aim to keep total balances under about 30% of total limits, and lower on any single card. Paying down balances is the quickest lever most people have. Closing unused cards reduces your available credit, which can push utilisation up, so think before closing old accounts that have no annual fee.

Hard searches and soft searches

A hard search happens when you formally apply for credit. It stays on your file for 12 months and is visible to other lenders. Several hard searches in a short period suggests you are hunting for credit and can lower your standing.

A soft search happens when you use an eligibility checker, check your own file, or a lender does a pre-approval check. You can see it, other lenders cannot, and it does not affect your score. Always use an eligibility checker before applying for a card or loan.

Errors and notices of correction

If you find something wrong, such as a debt that is not yours, a settled account showing as open, or an address you never lived at, raise a dispute with the agency. It must investigate, usually within 28 days, and contact the lender that supplied the data. You can also dispute directly with the lender.

If the entry is accurate but there is context a lender should know, such as missed payments during a serious illness, you can add a notice of correction. This is a statement of up to 200 words attached to your file. Lenders must read it if they are considering the entry, and it can prompt a manual review rather than an automatic decline.

Other things that help

• Pay every bill on time. Late payments and defaults stay on file for six years.
• Keep a long-standing account open. Length of credit history counts.
• Avoid unnecessary financial links. A joint account or joint mortgage links your file to the other person's. If the relationship has ended, ask the agencies for a disassociation.
• Check your address history is consistent across all three files.

Watch out for

Paid services that promise to "repair" your credit file. Anything they can do you can do yourself for free. Nobody can remove accurate information from your file early.