When you realise your score is on the lower end of the scale and start thinking about how to improve it, your next questions may be, “How long will improving my score take?” and “How hard will it be?”
The answer to both is that it varies from person to person. This is because the time and effort that’s required for improvement depends on …
- Which factors are affecting your credit score – Certain issues, such as having little or no credit history, can improve only so fast. You may be able to add new accounts to your credit profile in a matter of days, but you can’t magically add years of payment history to them just as quickly. Likewise, certain negative marks can stay on your credit reports for six years.
- How quickly lenders and other organisations report your account activity – Updates to your files can only happen once changes are communicated to the credit reference agencies. For example, registering on the electoral roll can help your credit profile, but it could take weeks — or longer — for your registration to appear on your credit reports.
Credit improvement can be a gradual process, but there are actions you might be able to take to move things along.
Factors that may affect your scores — and how fast you can expect improvement
Let’s break down some of the key factors that can hold your score down, and what it could take to make some progress in those areas.
Limited credit history
Little use of credit in the past may affect your score. Even if your credit journey is just beginning, you may have more credit-building options than you think. You might consider taking out a credit builder card or loan, or even a mobile phone contract — which can give you the chance to demonstrate you’re capable of borrowing money and repaying it.
Of course, your credit score won’t improve overnight. You’ll likely have to show that you can manage credit over time before you see those efforts reflected in your credit score.
Absence from electoral roll
Your score may be suffering if your name isn’t on the electoral roll. If you register (you can do so here), your electoral details — including name and current address — can appear on your credit report, giving lenders confirmation of your identity, which can help your credit score.
How quickly you could see a change would depend on how or where you register, as well as when the credit reference agencies receive your information. The turnaround can take eight weeks or more. In some cases, you may have to provide proof of your registration to a credit reference agency yourself.
You’ve taken out too much credit at once
Submitting a lot of credit applications at once could hurt your score, because it suggests to lenders that you’re relying on credit to manage your finances. If this has hurt your score, it may take time to see your credit score improve.
But as long as you meet repayments and avoid taking out even more credit, your score is likely to creep back up over time.
You’re using too much of your available credit
As a general rule, it’s advisable to try to keep your credit card utilization around 25% or less at any given time. For example, if your combined credit limit is £1,200, you should use no more than £300 of it. If you’re using a lot of credit, the time it takes to improve your score will largely depend on how quickly you can pay down your debt, and on your ability to maintain a utilization level of 25% or less consistently over time.
It’s not an exact science, of course — but taking this approach can help your score.
You have too much credit
Having too much unused credit can hurt your score. To fix this, it pays to close accounts you no longer use. But you need to be careful: An old account that demonstrates a good credit history can help your score. The effects of closing an account will depend on when lenders update your information and how much impact the account was having on your score to begin with.
Debt and court judgements
Court judgements for debt will stay on your credit reports for six years. Despite the negative effect, you can still focus on building your credit with other positive factors, such as making on-time payments on other loans or credit cards you may have. Creating a financial plan to help get yourself out of debt is a great start.
Being financially linked to another person
Sharing a financial account with someone who has a poor score can hurt your own score. Why? That financial tie means lenders will consider both individual’s credit ratings when evaluating one or the other for new credit.
If your financial association with someone has ended — as a result of divorce or separation, for example — you can file what’s called a “notice of disassociation” with each credit reference agency, asking for the financial ties to be removed.
Updates from lenders and other organisations
How quickly you can improve your credit score also depends on how quickly other organisations report on your account activity. Each bank, building society, alternative lender, local authority or other relevant organisation has its own schedule for updating this information — something to keep in mind as you try to get an idea about how long it might take to see your credit improve.
Ultimately, working to improve your score is all about making the best choices for your situation and having the patience to see them through. There’s no overnight fix — but working to improve your credit is worth the time and effort.