10 Exercises for a Healthy Credit Score, A credit score is like a report card of your financial health. It informs creditors about your capacity to take loans and pay back the principal. Whether you’re
looking to apply for a mortgage, secure a loan or even sign up for a mobile phone plan, your credit score plays a key role in determining how easily you can access credit and what interest rates you’ll pay.
If you have a lot of unpaid bills, loan defaults, and late payments, you may have a
bad credit score. However, having a bad credit score doesn’t mean you’re out of
options. You can improve your credit score by implementing some healthy financial
exercises to get better.
If you build your credit score by paying bills, the chances of you getting a loan at a
lower cost can multiply. In this article, we explore some exercises that will help you
build your credit score.
Table of Contents
1. Review Your Credit Score
The first step to improving your credit score is knowing where you stand. Regularly
checking your credit score helps you understand your financial health and spot any
errors or unexpected changes. In the UK, you can check your credit score for free
through services like Experian, Equifax, or TransUnion.
By reviewing your score, you can identify what’s helping or hurting your credit
rating—such as missed payments or high credit usage. If you spot mistakes, report
them immediately to get them corrected. Staying informed about your credit score
allows you to take control and make better financial decisions.
2. Pay Your Bills on Time
You can maintain a good credit score by making all of your bill payments on time.
Even after years, missing a payment will have a detrimental effect on your credit
score.
Set direct debits or reminders so you don’t miss out on these payments. This may
seem like a minor detail, but it goes a long way in demonstrating to creditors that
you are able to repay the loan balance.
3. Pay Outstanding Debt
While applying for a loan with bad credit is possible, having multiple debts will
affect your credit score because it indicates to lenders that you are a risky
borrower. When it comes to debts and liabilities, ensure you reduce what you spend
and repay all outstanding debts.
Start by listing all your debts, from credit cards to personal loans, and focus on
clearing high-interest debts first. If you’re struggling to keep up, consider speaking
to your lender to arrange a manageable repayment plan.
By reducing what you owe and making regular payments on time, you’ll not only
improve your credit score but also save money on interest in the long run.
4. Do Not Apply for More
When it comes to improving your credit score, less is often more. Applying for
multiple credit cards, loans, or other forms of credit in a short period can harm your
credit score. Every time you apply for a loan, lenders run a “hard check” on your
credit report, which can temporarily lower your score. Too many applications can
also make you look risky to lenders, suggesting you may be struggling financially.
Instead, focus on managing your existing credit responsibly. Only apply for new
credit when absolutely necessary, and take time to build a strong repayment
history before considering additional borrowing.
5. Low Credit Utilisation
Credit utilisation is the amount of credit you can use to the credit limit. Generally,
the utilisation rate should be below 30% so you don’t end up maxing out your
credit limit.
For example, you should use not more than £300 if your credit limit is £1,000. By
doing this, you show creditors that you are a responsible person who handles
money well.
6. Build Your Credit History
Building your credit history is an important step toward a healthy credit score.
Lenders look at your credit history to see how reliable you are at managing and
repaying money. If you’ve never borrowed before, you may have a “thin” credit file,
making it harder for lenders to assess you.
Start by using small, manageable credit, such as a credit card with a low limit, and
make sure you pay it off in full each month. Alternatively, setting up a mobile phone contract or utility bill in your name can also help. Consistent, responsible use will strengthen your credit history over time.
7. Register in the Electoral Roll
Registering yourself on the electoral roll increases your chances of credit approval.
This is because the lenders have a verified address and valid identity proof to run a
background check on you.
It enhances your application, making you appear as a trusted applicant for a loan.
If you ever decide to move, ensure that you update your address.
8. Switch Up Your Credit Mix
Having a good mix of credit can help boost your credit score over time. Your credit
mix refers to the variety of credit types you use, such as credit cards, personal
loans, car finance, or even a mortgage.
It is better for lenders to look at your credit history and see that you are using a
mix of credit cards and loans to pay for various expenses. However, it’s also
important to concentrate on managing your current mix well to strengthen your
score.
9. Turn to Specialist Lenders
If your credit score is low, then the traditional loaning companies will likely decline
your credit application. That’s where specialists come in handy.
These financial experts can help you seek the right loans that you can apply for,
even with bad credit and poor credit ratings. You get a shot at repairing your loan
while being able to borrow money responsibly.
10. Be Consistent
Boosting your credit score is a slow process that takes time and effort to master.
The day you decide to embark on improving your credit history, bear in mind that it
will only yield results if you stick with it.
By paying your bills, principles, and dues on time, you improve your credit report.
You need to look like an applicant who can be trusted with money when you apply
for credit.
Fix Your Credit Score
A good credit score is the key to accessing a better lifestyle and securing your
future. You can even apply for a loan with bad credit if you apply these healthy
exercises to maintain your credit rating.
Don’t wait anymore and start a new financial life that you have always wanted!
Adapt to reviewing your credit score, paying bills and instalments on time, and
achieving the credit freedom you deserve!
