How to improve your credit score in 2025

When you apply to borrow money, lenders check your credit history. Having a good credit score can open the door to better financial deals. You may qualify for a wider range of products and be offered better rates on things like mortgages, loans and insurance.   

In fact, research shows people with poor credit scores pay an extra £872 a year in interest (that’s £73 a month!).  

So what can you do to improve your credit score this year?  

What’s a credit score, anyway? 

Your credit score is a number that tells lenders how much of a risk you pose as a borrower. They use it to judge how likely you are to repay your debts.  

According to Experian, for a score with a range of 300 to 850, a credit score of 670 to 739 is considered good. Credit scores of 740 and above are very good, while 800 and higher are excellent. 

What impacts your credit score?  

Various things can hurt your credit score, including: 

• missed or late payments 

• going over your credit limit 

• having joint accounts with someone who has poor credit 

• applying for credit too often in a short period 

• regularly withdrawing cash on your credit card 

• bankruptcy, home repossession and count court judgments 

• not being on the electoral register 

• inaccurate information on your report 

• moving house frequently in a short space of time 

How far back does your credit history go?  

Your credit history goes back 72 months (six years). It records every time you make a repayment on time and every time you don’t. It updates every month, so each month, old information may drop off and new data may be added. 

Can you check your credit score?  

Absolutely! You can check your credit score for free at: 

• Clearscore 

• Experian 

• Credit Karma 

Why bother improving your credit score? 

Improving your credit score has several benefits: 

• You’ll have a better chance of being approved for credit cards, loans and mortgages. 

• You could have access to lower interest rates, meaning you could save serious money. 

• You may be offered higher credit limits. 

That said, you should only ever borrow what you can afford to pay back. 

How to improve your credit score 

Here are some key steps you can take to improve your credit score in 2025:  

Always make repayments on time  

Lenders want to know you can be trusted to pay back what you borrow as agreed. Make sure you’ve budgeted for debt repayments before agreeing to borrow money. 

Keep within your limits and consider your credit utilisation ratio 

If you keep within your credit limit, you’ll show lenders you’re managing your credit responsibly.  

What’s known as a credit utilisation rate (or ratio) is the percentage of available credit you’re using on credit cards and other lines of credit. It’s calculated by dividing your total revolving credit balance by your total credit limit and multiplying by 100 to get the percentage. 

For example, if your credit card has a £1,000 limit and your balance is £500, your credit utilisation rate would be 50%.