What is a credit score?​

Let's take a moment here to talk about what kind of information goes into your credit score. Obviously, a lot of the basic details are going to be personal to you. These could include the work you do, where you live and your yearly income, for instance. Beyond that, though, your credit score could also reflect things like any gaps in your previous payment history, any credit arrangements you already have and any problems you've had in the past with fraud, debt or even bankruptcy. Don't assume that a run of bad luck will necessarily haunt your credit score forever, though. Most of the information that goes into putting your score together will only go cover the last 6 years.

Many of these tips are things you'd already expect, but there are one or two odd ones mixed in that most people wouldn't usually think of.

• Get on the electoral roll

This is one of the stranger tips, but if you're looking to borrow money from a serious lender, you're going to have a much rougher ride of it if you're not registered to vote in the UK. Since you're supposed to be on the "full" version of the register anyway by law, it's a smart move to make sure you're all signed up. If you're worried about your personal information being sold, you can still opt out of being listed on the "open" register, but credit reference agencies will be using the full version  so you'll still show up when they look.

• Keep up with your existing credit payments

Your credit rating might be based on your past history, but it's really all about predicting your future actions. If your record's littered with late or skipped payments, you're going to look like an iffy prospect. Also, even if you never miss a deadline, you can still look riskier to a lender if all you ever do is pay back the absolute minimum amount. If you're worried you might have trouble making an upcoming payment, get in touch with your lender to see if you can arrange an easier schedule.

• Remember it's not all about you

Even if your own financial hands are perfectly clean, it's easy to muddy the waters of your credit score if you've got strong ties to a bad payer. If you've got financial links to another person, keep in mind that their credit history can affect yours. Sharing a joint loan, mortgage or other financial product with someone who's got a weak credit score might not be a great way to secure credit of your own.

• Try to keep your credit searches down

This is another thing that might not seem particularly important, but can still have an effect on your overall attractiveness to a lender. In general, you want to keep the number of searches being made on your credit history to a minimum. These "hard searches" leave fingerprints all over your file, and a lot of searches in a short time can look dodgy. For instance, if you get a rejection from one lender and immediately apply elsewhere, the new lender will probably work out you just got rejected by someone else. Applying for credit can be a minefield, but here’s a handy tip: use eligibility checkers or soft search tools before you commit to a full application. These clever tools give you a good idea of your chances without leaving a mark on your credit file. It’s a simple way to dodge the stress of rejection and keep your credit report looking clean.

• Get your facts straight

Another fairly obvious one. Lenders like to see consistency when they search your credit history, so make it as easy as possible for them to approve your application by ensuring your details match. For example, seeing the same address on all your credit applications, even older ones, will give your lender a lot more confidence in you. While you're at it, check regularly that there are no mistakes or outdated details in your credit files. Keeping those records spotless is the key to proving you're a safe pair of hands for a lender's money.

• Rebuild your credit

One last weird one to finish the list. If you've got a low credit score or not much of a previous payment history, you can boost them by signing up for a credit card with low acceptance standards. You'll probably find yourself stuck on a painful interest rate (maybe 35% or so—lenders like higher rewards when they take higher risks), but if you use the card on a "little but regularly" basis and always pay it all off each month before the interest kicks in, you can build up your credit score without getting hit with heavy repayments. If you've already got a credit card, even following the same basic principle with that can help ramp up your score—and avoid another hard search on your file at the same time.

• There's a secret blacklist and once you're on it you'll never get off!

Nope! Your details aren't being kept on a hidden list and you won't get blanket-banned for having a poor credit history. Most of your information expires after 6 years anyway.

• Wiping out your credit card balance is the secret to a good score

Oddly enough, no. Having a good credit score is more about making your repayments reliably than never borrowing at all. Lenders are in the business of collecting interest, so a strong history of paying up on time is what's crucial to them.

• Council Tax debts kill your rating

Not quite! Councils don’t directly report your payments to credit reference agencies. But here's the catch: if your unpaid Council Tax gets passed to a debt collection agency or results in a County Court Judgment (CCJ), that will show up on your credit history. So, while it’s not an instant hit to your score, it’s a good idea to stay on top of those Council Tax bills to avoid trouble down the line.

Read our guide: Council tax debt help

• You only have one credit score

As it turns out, the 3 credit reference agencies (Equifax, TransUnion and Experian) each have separate ranking systems and scales, so you'll almost certainly have different scores on each. All that really matters to lenders is the information those scores are based on. They never get to see your credit score anyway, only the records of your actual history and financial behaviour. In practice, what this means is that your score's a good overall indicator of your reliability, but it's your credit history that makes the real difference.

• Credit scores don't mean anything!

Yes they do—they're just not the last word in the matter. While your credit score itself is really just for your own reference, it's based on a lot of details about you that lenders will want to know. Having no credit history, for instance, doesn't give your potential lender any information to base their decisions on. Having a strong history of borrowing responsibly and hitting repayment schedules reliably, on the other hand, makes you look like a much safer gamble to them.

Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.