How I Improved My Credit Score in 2024

Do you remember the stress you would feel before the marks were revealed after a school examination? Yes, it was nerve-wracking. I thought once I passed my GCSE, I would no longer be anxious about my scores.

I couldn’t have been more wrong! Adulthood brought in a new set of scores, scarier and having a greater impact on every facet of my life compared to my math score from grade 5—my credit score.

Credit scores determine your creditworthiness, which in turn impacts whether you are eligible for a mortgage, credit cards, or loans. Your credit score affects my borrowing terms and conditions (interest rates) and insurance premiums (some insurers even reject to insure, as you may appear more ‘risky’). 

It is not just limited to financial products. A poor credit score will not allow you to rent the property you like or land a job you are well-qualified for. Why? Landlords and employers run background checks to check your creditworthiness; if you fail to pass it, you appear unworthy. Bad financial decisions might make you default on rent payments or undertake any unscrupulous actions at work.

Upon realising this far-reaching impact of my financial health on my life and future, I decided to actively work to improve my credit score in 2024. Here’s what I did.

Becoming Financially Literate

Unfortunately, schools and colleges don’t teach you financial literacy unless you are pursuing a degree in economics or finance. The first step I took towards improving my credit score was understanding how different loans (personal loans, mortgages and payday loans) work, what impacts my score, and how best to improve it.

I researched online, spoke to my friends, family and financial advisors, and even attended a free money management webinar. Here’s what I found out: in the UK, there are three credit reference agencies (CRAs): Experian, Equifax and TransUnion. Credit scores are measured using different criteria by each CRA, and these CRA scores can be trusted by different financial institutions. 

Your credit score is usually a three-digit number that’s divided across categories such as ‘very poor’ to ‘excellent’. CRAs calculate your score based on your credit history and how you handle your debts and finances.

Learn more about credit scores and bad credit loans today!

Get Credit to Build Credit Score

This was an important piece of advice I received during my journey to improving my credit score. I was under the impression that by not borrowing and living within my means, my credit score was secured. However, you aren’t really scored until they see your performance. Remember ballet recitals?

So, I took a credit card, made purchases, and paid it back on time. A few months later, I even took out a personal loan of £15,000 and cleared it before the period was up. In a couple of months, my credit score was already improving.

Paid My Debt On Time

Once I established my credit score, it became easy for me to get loans at a much better rate than before. However, here’s the catch – a good credit score is not a one-time effort. It is essential to keep working on maintaining it; one slip and you’ll climb down the rung. 

To battle this problem, I put my credit card and loan deductions on auto-payment. This allowed my loan to be deducted from my account, even when I forgot about the looming due date. Another important tip was to ensure I paid more than the minimum amount due. This not only helped me become debt-free faster, but it also gave my credit score a boost.

Dispute Inaccuracies in Your Credit Report

Mistakes happen, whether it’s a manual error or a machine discrepancy. However, it is important to verify and double-check every piece of information on your credit report. It may involve something as simple as a late payment record or inaccurate information about your personal details. Correcting these mistakes can save you a lot of headaches in the future when you actually need to make a significant financial purchase, like buying a house.

Add Extra Information To Your Credit File

Did you know that being an outstanding citizen can be a great strategy to improve your creditworthiness? You must register to vote as soon as you are eligible. This public record allows CRAs to verify your address and details, making sure there are no cases of identity theft. If you are moving home, make sure you immediately update your voter information.

Keeping your credit report updated with your rent payments is another crucial piece of information to include. This is usually a regular payment and shows that you are someone who can be trusted to pay back the loan on time.

Wrapping Up

Being mindful of your budget and expenses, paying loans and credit card debt on time, and not taking out unnecessary loans can help you build a positive credit score. Proper planning can help you secure your financial future, prevent you from going bankrupt, and even allow you to retire early.

I fixed my credit score in 2024. Are you ready to do the same in 2025?