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How to improve your credit score

Vehicle subscription providers care about your credit history and will want to know if you can afford your car subscription repayments.
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  • A low credit score may stop you from getting a car on subscription, as subscription providers perform soft credit checks before approving your application.
  • Using a credit card, registering to vote, and paying your bills on time can all help improve your credit score.
  • You can view and monitor your credit score online, either via credit reference agencies like Experian, or by using CheckMyFile.
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When you sign up for a car subscription, your chosen provider will usually perform a soft credit check to make sure you can pay for the subscription. A credit check involves looking at your credit history and credit score to see if you’re a reliable borrower. They’ll use this information to decide if you’re eligible for a car subscription.

A soft credit check won’t damage your credit score — but if your credit score is already low, this can limit your chances of getting a car on subscription. Learning how to improve your credit score can help you avoid this.

In this article, you’ll learn:

  • Why a good credit score is important.
  • What can hurt your credit score.
  • How to improve your credit score.
  • How credit scores affect car subscriptions.

Why is a good credit score important?

A good credit score allows you to access a wider range of products and services. You can get better rates on a mortgage or loan; get a car on finance or subscription; and banks and other companies will view you as a reliable borrower. 

Research from Harvard Business School also suggests that good credit is linked with good health and wellbeing [1-2]. Often, the steps you take to improve your credit score involve reducing debt, which can lower your stress levels. Plus, you’ll be able to access products and services that are linked with a better quality of life.

How to see your credit score

There are 3 main credit reference agencies (CRAs) in the UK: Experian, Equifax, and TransUnion. Each CRA collects information about your credit history and creates a credit report. Based on this, they’ll give you a credit score.

The scores and bandings are slightly different for each CRA:

CRA Equifax Experian TransUnion
Maximum score 1,000 999 710
Very poor 0 to 438 0 to 560 0 to 550
Poor 439 to 530 561 to 720 551 to 565
Fair 531 to 670 721 to 880 566 to 603
Good 671 to 810 881 to 960 604 to 627
Excellent 811 to 1000 961 to 999 628 to 710

It’s important to track your credit score with each agency. A score of 720 is considered Poor with Experian, but Good with Equifax and TransUnion. So without context, a credit score doesn’t mean much.

As Money Saving Expert’s Martin Lewis explains, lenders don’t usually look at your credit score in isolation. Instead, they view your credit file as a whole, and use this to decide whether to lend you money or provide a service. [6]

Credit scores were created as a simple indicator of creditworthiness for consumers. You can view your credit score by signing up for each CRA individually, Alternatively, you can sign up to a free 30-day trial with CheckMyFile. After the trial expires, the membership costs £14.99 a month, and you can cancel online anytime. This will show you all your credit scores in one place.

Some companies will tell you which CRA they use to check your credit score. Of the main car subscription companies, Onto uses Equifax, while elmo and Care by Volvo use Experian. Other companies don’t reveal which CRA they use, so using a service like CheckMyFile can ensure you’re on track with all 3 agencies.

When you know what your credit score is, you can take the plunge and apply for your car subscription — or make a plan to improve your credit score.

What can hurt your credit score?

  • Late payments - Regularly paying bills, rent, loan or credit card payments late will take its toll on your credit score.
  • Maxing out your credit limit - The standard rule of thumb has been to use no more than 30% of your credit limit, but recent research suggests people with the best credit scores use no more than 4.1% of their credit limit [7].
  • Becoming a victim of fraud - If someone commits fraud in your name, this can stay on your credit report for up to 6 years.
  • Making lots of credit applications - When you make a credit application, a hard credit check is usually carried out on your credit record. This leaves a mark on your credit file that other lenders can see and your credit score temporarily drops a few points. Too many hard credit checks in a short space of time can signal that you’re desperate for credit and negatively affect your credit score. A hard credit check will stay on your report for 12 months.

11 ways to improve your credit score

1. Register on the electoral roll

If you’re eligible to vote in the UK, make sure you’re registered on the electoral roll. It’s a fast, easy way to improve your credit score, as it helps lenders quickly verify your name and address. Register on the electoral roll at the gov.uk website.

2. Get a credit card — and use it responsibly

Using a credit card sensibly can help to show lenders that you’re responsible with money. Paying back what you owe in full and on time will help to improve your credit score and make you look more attractive to other lenders.

If you can,get a 0% interest credit card and use it to pay for small purchases. Otherwise, you can use a credit builder credit card which is specifically designed for those looking to improve their credit scores. Try to limit your spending to less than 5% of your credit limit, but definitely no more than 30%. 

Make sure you pay off your credit card in full every month or at least meet the minimum monthly repayment. If you miss repayments, this tactic could actually harm your credit score.

3. Pay your bills on time

Avoid defaulting on scheduled payments with your utilities companies, mortgage provider, or landlord. Consistently late payments can quickly damage your credit score.

Set up direct debits and/or standing orders to make sure your bills are paid promptly without you having to remember to make manual payments. Ensure you have enough money in your account to avoid unarranged overdraft fees.

4. Prioritise clearing debt over saving

If you have any loans (excluding your mortgage and student loan), try to pay these off before you start saving. Savings won’t show up on your credit report, but loans will — so prioritising debt reduction can help improve your credit score.

Some people report short-term drops in their credit score when they pay off a loan, especially if it’s the only loan on your credit report. But ultimately clearing the debt will reduce your debt-to-income ratio, which will boost your credit score.

5. Keep your accounts open

There’s no need to close your bank and/or credit accounts, even if you don’t use them any more. Keeping accounts open creates a longer credit history, which gives CRAs a more accurate picture of your financial habits.

6. Avoid payday loans

Payday loans are short-term loans that often have high interest rates. If you can’t pay them back on time, they can quickly spiral out of control, leaving you with more debt and a damaged credit score.

If you need emergency cash, try to borrow from friends or family or set up an arranged overdraft with your bank before turning to payday lenders.

7. Check your credit report for mistakes

Even small mistakes such as a misspelt address can affect your credit score. So check your credit report and get any errors corrected as soon as possible. You can contact the provider directly or ask the CRA for help. You can also add a Notice of Correction if there is negative information on your account, such as a missed payment, that you'd like to explain.

8. Make use of interest-free credit

If your credit score is OK, you may be able to access interest-free credit cards. This means you can borrow money for free (for a set time) and prove you’re a reliable borrower. Just make sure you’ve cleared your debt before the interest-free period ends.

People with poor credit scores may not be able to access 0% interest credit cards. Make sure you know what your credit score is before you apply, as making applications that are likely to fail will further damage your credit score.

9. Only borrow what you can afford to pay back

Borrowing more than you can afford may lead to county court judgments (CCJs), individual voluntary arrangements (IVAs), and even bankruptcy. All of these will have a significant negative impact on your credit for at least 6 years [8]. 

Avoid taking out more loans or credit cards to pay for existing debts. If you’re struggling with debt, charities like StepChange can help you manage it.

10. Avoid bank or identity fraud

Fraud can leave an imprint on your credit report. If someone commits fraud in your name, the information will be stored on your credit file.

Avoid becoming a victim of fraud by using strong, unguessable passwords, and don’t use the same password for multiple accounts. If you notice unusual or fraudulent activity, report it to your bank and the CRA immediately. This can minimise the damage to your credit score.

11. Limit your credit applications

If you’ve been rejected by one company based on your credit score, don’t immediately apply with another. Each hard credit check leaves a mark on your credit report; multiple checks can reduce your credit score.

If you’re declined based on your credit score, take the time to implement these steps and improve your credit score. This is much more likely to give you a better chance the next time you apply.

How long does it take to see credit score improvements?

Credit score improvements don’t happen overnight. It can take a few months to several years to see significant changes. It all depends on the current state of your credit score.

Events like bankruptcy and CCJs will stay on your credit report for at least 6 years. It can be difficult to get credit during this time. But by taking these steps in the meantime, you can improve your score ready for when these expire.

Check your credit score for improvements every few weeks. Some platforms allow you to set up notifications so you’re alerted when your credit score changes.

Credit score and car subscription FAQs

I have a low credit score — will I be able to get a car on subscription?

It depends on the provider. Flexed is a good option for people with a low credit score, as they underwrite their own contracts. That means they may be more willing to consider drivers with a bad credit history. Some providers like Care by Volvo carry out a hard credit search, so if you're trying to book a car with them, you must be sure you want to go with them.

When it comes to soft credit searches, in our experience, most providers check your credit history that way so you have more flexibility when comparing different vehicle subscription services. For example Onto and elmo both won't run a hard search on your credit report. We have a detailed guide on vehicle subscription credit checks.

Can I get a car subscription if I’ve been rejected for car finance?

Personal contract purchase (PCP) car finance tends to have strict credit rules. They’re tying you into a long-term lease, so they want to be sure they’ll get paid for the duration of the contract.

Car subscriptions are usually issued on a rolling monthly basis, and can be cancelled at short notice. So the terms are usually more flexible when it comes to checking your credit score. This is one of the reasons to get a car on subscription instead of on finance.

However, car subscription providers usually perform a soft credit check (sometimes known as an “affordability check”) before they approve your application. Some may even perform a hard check - it’s ultimately up to the individual provider. Find out more about car finance vs car subscription.

Credit checks and car subscriptions

Want to know how credit scores work when you apply for a car on subscription? Find out more about credit checks and car subscriptions.

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Article sources
Our writers are required to use primary sources of information to support their content. These include research from authoritative brands, government data sets, first-hand experience where relevant and advice from industry experts.

We also reference useful information from other reputable websites where appropriate and data is fact-checked. See our editorial guidelines.
  1. Good Credit and the Good Life: Credit Scores Predict Subjective Well-Being
  2. Consumer credit scores as a novel tool for identifying health in urban U.S. neighborhoods
  3. What Are the Different Credit Scoring Ranges? | Experian
  4. Equifax revamps credit score scale: what does your rating mean now?
  5. What is a good credit score?
  6. Martin Lewis: Why you shouldn't worry too much about your credit score
  7. Debunking a credit score myth: Forget what you’ve heard. Use much less than 30% of your available credit card limit
  8. How bankruptcy affects me

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