It's worth having a good credit score for the simple reason that if you have to borrow, you will be eligible for the better deals if you score well. Of course it is better not to borrow at all, but sometimes you need to, eg when buying a house.


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Lenders charge interest based on their assessment of risk. The higher risk you appear to them, the higher the interest they will charge you. Essentially with high risk people, they assume that at some point you will default, so they try to make as much money from you up front by charging a high rate of interest. That way, if you do default, they will already have recouped a lot of money from you.

The borrower of course wants to pay as little interest as possible. Therefore you can save yourself thousands in interest if you attend to your credit score.

1. Don't have too many credit cards. The more cards you have with debt on them, the lower you will score. Therefore pay off some cards and cancel them.

2. Don't have too much debt outstanding - the more debt you have, the lower you will score. Again, the remedy is to pay off some of this debt.

3. Too many credit searches. Everytime you apply for credit, the lender concerned does a search on you with a credit agency. Each search is recorded in the report they receive. If they see too many searches, they will either conclude that you are desperate to borrow (and hence in some sort of trouble) or that you are a "rate tart" who switches from lender to lender in search of the best rate. There is nothing wrong with being a rate tart of course - but lenders hate it, as they make less money out of you. Therefore cut down on the number of times you apply for credit.

4. Keep up payments and never be late. Always make your payments on time and don't default or miss. This applies to paying utility bills like gas and electricity as well. Lateness always gets recorded in your credit report.

5. Don't have too much available credit. Even if you are not using all this potential credit, it still hurts your score, as new lenders tend to be reluctant to give extra credit to you. Their thinking goes, what if you decide to access all the potential credit at the same time and get into trouble? Therefore if you have unused credit cards, cancel them.

6. Don't move house. Moving home hurts because the credit people are looking for history at a particular address. Therefore, if you need to apply for new credit, do it before you move house.

7. Don't change your gas, electricity phone or insurance providers just before you apply for credit. When you change your suppliers, they check your credit score - and this counts as a search on your record. Because of the automated nature of credit scoring, your potential new lender won't distinguish between a search from a credit company and a search from a utility provider.

8. Putting a fixed land line number instead of a mobile number on your application form can help with security checks and improve your score.