Investment planning, Protecting

Understanding and Improving Your Credit Score

19 June 2023

What is Credit?

Credit is, to put it simply, the ability to borrow money or access goods or services with the promise of paying for them later. Credit can come in many forms, including credit cards, loans, mortgages, and lines of credit. Essentially, it’s a measure of your financial trustworthiness and ability to repay debt – the more credit that you have, the more money you will be able to borrow.

Many people don’t check their credit score semi-regularly, let alone on a frequent basis, leading to them doing nothing to improve their credit in any way. According to a YouGov survey in 2021, around 69% of the adult British population didn’t know their credit score -whilst 32% didn’t even know where they would find that information.

Why is it Important to Have a Good Credit Status?

Having good credit is essential for achieving financial goals and building wealth. It can help you qualify for loans with favourable terms and lower interest rates, making it easier to buy a car, a house, or start a business. Good credit can also help you save money on insurance premiums, utility deposits, and other expenses.

The Disadvantages of Bad Credit

On the other hand, bad credit can make it difficult to access credit and lead to higher interest rates, fees, and other charges. It can also negatively impact your ability to rent an apartment, get a job, or even open a bank account.

credit score check

What is a Credit Score?

The elements from your credit report that shape your credit scores are called credit score factors. These can be a varying degree of things that can have both a positive and negative impact on your credit score. We’ve compiled a short list of frequently asked questions about credit scores at the bottom of this article for more information.

How Can I Check My Credit Score?

There are many platforms to perform a score check. The most popular companies offering checks are:

  • ClearScore – a free service with an easy-to-use app.
  • Experian – a free service with paid benefits
  • Equifax – free for 30 days then a paid subscription

What Impacts Your Credit Rank?

Some factors that impact your credit score are:

Your total debt

The amount of money you owe or have yet to pay back will be a factor, whether these are unpaid parking fines, credit card charges or even your mortgage.

Even the amount of time that you spend in overdraft can have an effect on your credit score, even despite a long-standing relationship with the bank in question.

Number of late or missed payments

Having a history of paying your bills on time will only serve to improve your credit score, thus making you more favourable to lenders. If you miss a series of regular payments to lenders they may record a default on your report.

This can significantly lower your credit score for up to six years. Borrowing more than you can afford. If you can’t pay off your debts, you may have to get a Debt Relief Order or Individual Voluntary Arrangement.

Age of accounts

Credit scorers will look at the average age of your credit accounts, so try not to change too much. A long-term account that you’ve stayed within the agreed credit limit will only improve your standing among creditors.

Lenders will be looking to see if you are responsible with you, so going through several accounts that you’ve maxed out or stayed close to the agreed limit will have an adverse effect. Make sure all your accounts are in the black or you at least have a plan to ensure that it doesn’t stay in the red for much longer.

How To Improve My Credit Score

You may have a low score and are looking to improve it so that you are more attractive to lenders, or you might have a really good score and are looking to see if you can bring it any higher – now is always a good time to look into making your credit score even stronger.

Paying Bills & Reducing Credit Card Balances

Paying bills on time and reducing your credit card balances are obvious – keeping your credit card balance below 30% of your limit is a great place to start.

Building a positive credit history may seem obvious, but this is typically done through monthly payments and can rely on a salary – so patience is incredibly important here. Don’t get bored of being frugal or careful with your payments, stick it out and reap the long-term benefits of an improved credit history.

Mix Of Credit Types

A mix of credit is always really good; having credit cards, loans and direct debits shows that you can be trusted with any form of credit. Be careful with this though, as opening accounts for the sake of it can actually be harmful to your credit score in the long run. Be cautious with new credit applications where you can – only open where completely necessary.

Account History

With this in mind, keep your old accounts open for as long as you can. An account with a 10 years history of transactions is just a long line of credit history and losing this can have a huge impact on your credit utilisation ratio.

Of course – circumstances change and perhaps there is good reason to close one of your more long-standing accounts, but unless absolutely necessary then keep those accounts open.

Morrinson Wealth do not provide Credit Card products.

Credit Score FAQs


How long does it take to improve a credit rating?

It will depend on your financial situation, as some people may need small changes to see improvements in a matter of months. Others may be looking at long-term financial plans and achieving improvements over a period of years. Speak to our experts who can guide you on how to improve your score.


Do direct debits improve or affect a credit rating?


Does having an overdraft affect a credit rank in the UK?


Do standing orders help a credit score?


What is a credit utilisation ratio?


What is the fastest way to fix a credit score?


How can I start building credit?

Speak to our financial advisers or fill in the form below to find out more about intelligent & effective ways to improve your credit today.

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