How to Improve Your Bad Credit Score in the UK Guide

In the United Kingdom, whether you have a bad credit score depends on the number assigned by the credit reporting agency (CRA). Each CRA has its own rating for poor credit.

Transunion rates score from 0 to 600 as poor, Equifax considers scores from 0 to 580 as poor, and Experian deems scores from 0 to 720 as poor. If your credit scores fall below these values, you’re dealing with bad credit. This can limit your financial opportunities and lead to higher interest payments on credit, including your mortgage. That’s why it’s crucial for you to take steps to improve your credit score.

In this guide, we’ll explain why checking your credit report for errors is essential. We’ll provide you with simple steps to effectively address any issues. We’ll also cover ways for you to enhance your bad credit score, which can open doors to better loan offers and lower interest rates.

Importance of Checking Your Credit Report

Your credit history could have mistakes or old information that might be logged in your credit report. This can lead credit reporting agencies (CRAs) to give you a bad credit score because of these inaccuracies and outdated information. That’s why it’s crucial for you to regularly look at your credit report from all three credit agencies. This way, you can find any mistakes that might be affecting your credit score.

Checking your credit history might seem overwhelming at first. But if you focus on specific parts of your report where errors might most often appear.

Key Things to Check on Your Credit Report

Personal Details: Make sure your full name, date of birth, and current address are correct. Check that any previous addresses listed are accurate.

Credit Accounts: Look at all your credit card accounts, loans, and utility payments on your report. Confirm that the reported balances and credit limits match your records. Identify and recognize all accounts and outstanding debts.

Court Claims: If you’ve had a County Court Judgment (CCJ), Individual Voluntary Agreement (IVA), Debt Relief Order (DRO), or bankruptcy, carefully review the details. Verify the outstanding balance and whether it’s been satisfied or not.

Overdraft Usage: If you’ve used an overdraft on your current account, make sure the reported amount is correct.

Financial Ties: Check for financial connections that occur when you share a credit agreement with someone else. If you no longer have such an agreement, take steps to disconnect, especially if the other person has a poor credit history.

If you notice any missing information on your report, report it promptly to your lender or credit reference agency. For example, if you have a well-managed credit account that’s not on your report, consider adding it. Keep in mind that it may take several weeks for new accounts to appear.

Improving Your Credit History and Fixing Errors

While you can’t erase your entire credit history, you can take these steps to address mistakes on your credit report:

Gather Your Documents: Before disputing an error, double-check that it’s a genuine mistake by reviewing your records. Collect all relevant documents as evidence. Lenders usually require this documentation to update your records. For example, if you changed your name due to marriage, you might need to provide a copy of your marriage certificate. To dispute a missed payment, you may be asked for a bank statement as proof of payment.

Contact Your Lender: As soon as you identify an error, reach out to your lender to challenge it. Rectifying your credit report may take several weeks. Inquire if your lender accepts screenshots via email to speed up the process. Remember that your lender isn’t obligated to correct the error, and their decision depends on the nature of the issue and the strength of your evidence.

Engage with the Credit Reference Agency: You can also ask the credit reference agency to communicate with your lender about the mistake. However, they can only update your credit report with the lender’s consent. Provide a clear explanation of why the entry is incorrect. Be aware that there’s no guarantee your dispute will be accepted. In the meantime, the credit reference agency may add a notice of correction to your credit report, letting other lenders know you’ve reported an error.

Resolving Old Financial Ties

To remove outdated financial connections from your credit report, apply for a notice of disassociation through the credit reference agency. Ensure you close any joint accounts beforehand, as the agency can’t process your request otherwise. 

Keep in mind that the three major credit reference agencies in the UK (Equifax, Experian, and TransUnion) maintain separate information, so you need to contact each one individually.

When the Information Is Accurate

If the information is correct, you may contact your lender to request the removal or clarification of specific entries on your report. While your lender isn’t required to comply, they may consider various factors, including:

• A positive payment history with the lender
• Loyalty as a customer
• Valid reasons for the request

Most importantly, remember that most negative marks on your report automatically disappear after six years.

Requesting the Removal of Information from Your Report

Explain the steps you’ve taken to correct the factors that led to the negative mark in the first place. For example, setting up a Direct Debit to ensure timely payments can help your case. You can also ask credit reference agencies to include a notice of correction on your file, explaining the circumstances that led to your debt, such as redundancy or illness. Smaller blemishes, like a single missed payment, may be more likely to be removed than significant issues like CCJs or bankruptcies.

Accessing Credit with a Less-Than-Perfect Financial History

We specialise in providing payday loans for people with bad credit. This means you don’t have to wait for six years for defaults to vanish from your credit report before securing financing.

If you’re struggling with debt, you can access free financial advice and support from professional debt specialists. Visit Money Wellness, StepChange, Citizens Advice, National Debtline, or Money Helper to explore available resources.

The Bottom Line: Safeguard Your Financial Future

Protecting your credit history and addressing errors is essential for unlocking better financial opportunities. By regularly checking your credit report and following the steps in this guide, you can maintain a strong credit history and improve your access to financial benefits.