Your credit score is the backbone of your personal finances. It is the first introduction to how responsible you behave in daily bills and debt payments. Year 2025 is special, like all previous years, because this year too, you have many life goals and financial targets. In fact, as the years pass, you are feeling the strong urge to get closer to the aim of a stable life.
If you want all good things to happen in your finances, including stability and financial freedom, a good credit score is the key factor. Whether you invest, take a loan or even apply for a good job, your credit rating can affect all opportunities.
Top ways to get a rise in your credit score
Falling between the credit score range of 561-720 or even worse, that is 0-560, can be destructive. Your financial life may take an unprecedented turn, leaving a long-term impact.
Thankfully, there are ways that can help you improve your credit rating despite all issues. These are practical ways that inspire little but effective changes in your daily financial habits and lifestyle. Read them below and follow with consistency.
1) Pay bills and debts on time
Delayed and unpaid bills are the two most important factors that affect your credit score. Always make timely payment of bills like utility and gas consumption bills. Similarly, the debt payment should be on time. personal loans, credit cards, medical loans, mortgage, whatever debts you have, pay timely instalments for that.
You will read many more tips below, but this suggestion is the most important one. Paying bills and debts on time is at the core of every financial habit that can affect your credit score.
Why does it matter in 2025?
Lenders today use real-time financial data of loan applicants. Your OTT subscriptions, rent payments, utility bill payments, and all records can be obtained by lenders. Hence, you need to be cautious about how timely you pay the bills.
Action plan
- Activate auto debit, setting the minimum payment amount for all debts.
- Use budgeting apps or reminders to ensure on-time payment of bills.
- Contact the lender if you are struggling financially to work on a new repayment plan.
2) Check your credit report regularly
Whether you apply for a loan or not, always check your credit report regularly. Make sure that all details in your record about your financial actions are correct. Credit reference agencies generate one free report annually. Take advantage of that opportunity. Take your report from all three agencies, Experience, Equifax and TransUnion. However, even if you have to pay a nominal fee, get your credit report either monthly or once in two months to check it.
Why does it matter in 2025?
In the modern era, due to digital banking and online transactions, your financial activities are recorded faster. Hence, it is vital to check the report frequently to get errors rectified at the right time. Errors like an outdated account, an incorrect address, or an unrecognised inquiry can affect your credit score immediately.
Action plan
- Access a free report from all three credit reference agencies once a year.
- Besides the free report, keep getting reports every 3 to 6 months.
- Dispute inaccuracies quickly.
3) Avoid applying to multiple lenders at once
Whether you apply for a loan or a line of credit, make sure you do not apply to many lenders at the same time. This creates multiple search footprints on your credit report.
This makes you look credit hungry, and lenders think that you are desperate to borrow funds. It gives them a hint that somewhere you mismanaged your finances, which is why you are in a hurry to borrow funds. Sometimes applicants do it out of ignorance, they do not know how sending multiple queries affect their credit score. But now you know it, then use this information for your benefit and do not let ignorance steal a few but precious points from your credit rating.
Why does it matter in 2025?
These days, lenders use AI-powered risk assessment tools that assess applicants based on their credit-seeking behaviour. People applying to many lenders prove to be credit hungry. This can considerably affect approval chances as well as affect your credit score due to your loan rejections. Hence, apply to only one lender at a time.
Action plan
- Use soft check tools or eligibility checkers before applying for a loan.
- Apply for a loan or credit line only when you actually need funds.
- Keep a gap of 3 to 6 months between two credit applications.
4) Keep credit utilisation below 30%
The ratio tells how much of your available credit you are using. Example – your credit limit is £3000 and you have consumed £2400. It means 80% of the credit limit is used.
This high limit is risky for lenders and affects your credit score considerably. Especially, missing or delaying repayments at this stage affect your affordability for other loans in the future. This is why you should always make sure that your credit utilisation ratio never crosses the minimum limit of 30%. That shows an irresponsible financial behaviour, and finance companies notice it immediately.
Why does it matter in 2025?
As per recent trends in credit assessment, finance companies give more weightage to revolving credit manager of a person. This includes overdrafts and credit card balances. These are especially credit cards, which are high-interest borrowing options. Hence, little delay in instalments or not paying the instalments accumulate interest rate that is already high.
Action plan
- Try to pay the extra balance before the end of the month to avoid reporting a big pending balance to credit reference agencies.
- Use multiple cards (if manageable) to spread your expenses in place of using one card.
- Talk to your credit company to increase the credit limit but make sure your spending is not growing. Do it for the sole purpose of repaying loans on time.
5) Keep your old accounts open
The longer the length of your credit history, the higher your credit score. This is why you shouldn’t close your old accounts. This shows the lenders that, for a long time, you have been managing credit successfully. Closing these accounts shortens your credit history and also proves that you were failing to manage credit accounts successfully.
Why does it matter in 2025?
New-age AI-based credit assessment procedures and algorithms significantly affect your credit score. This is due to high weightage to account age and stability.
A long history can even help you prove your creditworthiness if you get a CCJ on your file. In such circumstances, lenders always get deep into your credit history. If they see you are managing old accounts even now, they understand that it is a situation that has caused you financial chaos. But in past you were doing good in finances.
Action plan
- Keep old credit card accounts open even if you don’t use them.
- Use the account occasionally for small purchases.
- Only close accounts with high fees and security risks.
Conclusion
The suggestions above apply in practical life, and you can see a considerable rise in your credit score. However, the most crucial suggestion is to embrace self-discipline. This always works, and in fact, behind every tip to improve credit score, self-discipline is the only driving force. Until and unless you control the financial habits that derail your stability, working on suggestions will be useless. But as you have seen the drawbacks of a poor credit score, you surely understand and realise the importance of a good chance. Hence, start working on your plans and stay consistent.