Knowing how to build your credit fast in the UK is essential. But before I get ahead of myself, let me explain what a credit score is and why you should care.
(Part 6 of the Wealth Wellness Series. If you’ve missed any of the previous parts, you can click here to access them.)
Your credit score is like a financial report card. It tells banks and lenders how reliable you are when borrowing money and paying it back in the time agreed. Your credit score isn’t just about getting loans. It affects your ability to rent a home, get a mobile phone contract, and sometimes even land a job.
Despite what some people think, you don’t need to be rich to have a good credit score. You just need to play the system strategically.
The Borrowing Paradox: Necessary but Dangerous
Building a good credit score is mostly tied to borrowing, which seems counterintuitive, given the advice to shun debt. There’s a very famous finance guru who advises avoiding borrowing altogether—impractical advice, if you ask me.
Borrowing is a necessary evil—it only becomes truly harmful if misused or mishandled. Many of us need to borrow to fund our asset-acquiring, wealth-building ventures, whether it’s buying a home, investing in education, or starting a business. If we must borrow, the goal should be to borrow as cheaply as possible, and this is where having a good credit score comes in. A higher score unlocks lower interest rates, better financial products, and more flexible repayment terms.
How is Your Credit Score Calculated in the UK?
In the UK, your credit score is calculated by three main agencies:
- Experian (score ranges from 0-999)
- Equifax (0-1000)
- TransUnion (0-710)
Each agency has its formula, but they all consider:
- Borrowing history (loans, credit cards, mortgages)
- Repayment behaviour (on-time payments matter!)
- Credit utilisation (how much of your available credit you use)
- How long you’ve had credit (older accounts boost your score)
- Public records (like bankruptcies or court judgments)
- Soft and hard searches (applying for too much credit in a short time can hurt you)
The Credit Score Myth No One Talks About
Here’s the contrarian take—you don’t start life with a perfect credit score and “lose points” as you go. Instead, you start with no credit history, which is often seen as risky. Lenders prefer to see an established pattern of responsible borrowing. That means you could still have a poor credit rating even if you’ve never been in debt.
No Credit History? Here’s How to Build Your Credit Score Fast
If you’re new to the UK or an 18-year-old with no credit history, your first task is to start building one—quickly and efficiently.
Step 1: Get on the Electoral Roll
This is the easiest way to boost your score. Registering to vote helps lenders verify your identity and can improve your score almost immediately. If you’re a non-UK national, you might not be able to register, but don’t worry—there are other ways to build credit.
Step 2: Open a UK Bank Account
A current account with a major UK bank (like Barclays, Lloyds, or HSBC) establishes a financial footprint. Some banks even offer credit-building accounts designed for newcomers.
Step 3: Get a Credit-Builder Card
A credit-builder credit card (like those from Capital One or Aqua) is designed for people with no credit history. The trick? Use it for small purchases (think groceries or Netflix) and pay it off monthly. This shows lenders you can manage credit responsibly.
Step 4: Set Up Direct Debits for Bills
Even paying your phone or utility bills on time contributes to your credit history. If your name isn’t on the bill, ask your landlord or flatmates to add you as a named account holder.
Step 5: Avoid Payday Loans Like the Plague
Some think taking out a small payday loan and repaying it on time will help their score. Wrong. Payday loans signal financial desperation to lenders and can tank your score.
The Fastest Way to Improve Your Credit Score in the UK
Want to turbocharge your credit rating? Here’s what you need to focus on:
1. Keep Your Credit Utilisation Low
If you have a credit limit of £1,000, avoid using more than 30% of it (£300). This tells lenders you’re not reliant on credit.
2. Pay Off Your Balance in Full
This is a big one, and many people ignore this tip. Minimum payments keep you in debt. Paying off your balance in full each month shows lenders you’re financially responsible and not living beyond your means.
3. Limit Hard Credit Checks
Every time you apply for credit, lenders perform a hard search, which can temporarily lower your score. If you need a loan or credit card, use eligibility checkers first—they perform soft checks that won’t impact your rating.
4. Don’t Close Old Accounts
The longer you’ve had credit, the better your score. If you have an old credit card you don’t use, keep it open and use it for small purchases now and then. I’ve shared a lot about my debt journey. I still have one of the credit cards that once carried a high balance, but now I only use it for purchases I can pay off in full each month.
5. Use Rental Payments to Build Credit
Most landlords don’t report rent payments to credit agencies, but you can change that. Services like CreditLadder and Canopy your rent payments to Experian, helping build your credit profile.
The Harsh Truth About Credit Scores
Your Credit Score Doesn’t Matter as Much as You Think
Yes, it’s important, but lenders don’t just look at your score. They assess your full credit report, income, and affordability before approving you. A high credit score doesn’t guarantee getting a loan or mortgage if your income is too low.
“No Credit” is Worse Than “Bad Credit”
People assume no credit history is neutral. In reality, it can be worse than having a low score. Lenders can at least see a track record with bad credit—no credit means you’re an unknown risk.
Final Takeaway: Play the Game Smart
Building and maintaining a good credit score in the UK isn’t hard if you know the rules. The key is to borrow strategically, never miss payments, and build a solid track record over time.
Don’t fall for the myths—credit scores aren’t about wealth but habits. Start small, stay consistent, and have a strong credit profile before you know it. Want more quick money hacks? Follow me on the Gram.
