Looking to build your credit score? thimbl could help

Your credit score plays an important role in your overall financial health, especially if you’re thinking about making an application for a credit product, such as a mortgage or credit card. The better your credit score, the better your chances of being approved for credit, and you could also gain access to better interest rates.

Wondering how to improve your credit score? Whether you have no credit history and are hoping to build your score, or you have a history of bad credit and would like to begin your journey towards a healthier credit position, our tips on how to improve your credit score could help you get started.

How to improve your credit score

1. Make sure all your bills and credit commitments are paid on time
   Your credit provider will report a late or missed payment to the credit reference agencies (CRAs), and this will harm your credit score. If you think you might forget to make a payment, it could be worth setting yourself a reminder, such as an alarm on your phone or a calendar memo. You could also consider setting up a Direct Debit or continuous payment authority (CPA), which allows your provider to take regular payments from your debit card.


2. Check the information held on your credit report
   Incorrect or out-of-date information on your credit report could lower your score. You should make a habit of regularly checking your credit report for errors.
   If you do spot any errors, you should report them to the CRA as soon as possible.
   You can check your credit report through any of the three major CRAs in the UK:

- Experian
- Equifax
- TransUnion

Please note: TransUnion and Experian are free to use. If you’d like a more in-depth view of your credit report, you can sign up for an Experian CreditExpert account, which costs £14.99 per month once the 30-day free trial period comes to an end.
An Equifax account comes with a 30-day free trial period and is then priced at £14.95 a month.

3. Register to vote
   How does registering to vote help your credit score?
   Registering to vote at your current address could help potential credit providers confirm your identity which in turn could boost your credit score.


4. Think about your financial associations
   Being financially linked with somebody who has a bad credit score could affect your own. Living with or being married to someone will not financially link you to them, unless you share a joint account or make a joint credit application.


5. Be mindful of the number of credit applications you make
   Whether it’s a credit card, loan, or mortgage, each time you make an application for credit with a provider, a creditworthiness assessment will be carried out, and this will include a hard search or an Open Banking check. Multiple hard searches in a short period of time could cause your credit score to decline.
   Using an eligibility checker can give you an idea of how likely you are to be considered for a credit product before you make a full application.

Got a credit card?

There are several ways that your credit card could influence your credit score.

1. Stay well within your credit limit
   Your credit limit is the total amount of money you’re able to borrow with your credit card. A credit limit should not encourage you to spend money that you don’t need to, or that you can’t afford to repay, and you should never exceed your credit limit. Trying to spend outside of your credit limit could result in your transaction being declined.


2. Keep your credit card utilisation below 30%
   Your credit card utilisation is the amount of money you’ve spent of your credit limit. Credit card utilisation is shown as a percentage. If you had a credit card with a £200 credit limit and you spent £50, your credit card utilisation would be 25%.
   How does credit card utilisation work if you have multiple credit cards? In this case, the utilisation will be calculated on your combined credit card balances.

- Credit card one has a credit limit of £200. You spend £20 on this credit card. Your credit card utilisation is 10%.
- Credit card two has a credit limit of £500. You spend £40 on this credit card. Your credit card utilisation is 8%.
- Credit card three has a credit limit of £1,000. You spend £120 on this credit card. Your credit card utilisation is 12%.
- Your overall credit card limit of each card combined is £1,700, and you have an overall credit card utilisation of 10.58%.

Keeping your credit utilisation below 30% could work in your favour if you’re hoping to build your credit score.

3. Avoid using your credit card to make a cash advance
   A cash advance is when you use your credit card to withdraw money from a cash machine, or at the bank. This could be a red flag for poor money management which in turn, could have a negative impact on your credit score.


4. Contact your lender if you’re worried about an upcoming repayment
   If your financial situation changes and you think you might struggle to make a repayment, you should contact your lender as soon as you can. A late or missed repayment will harm your credit score. Don’t wait until your repayment date has been and gone; the sooner you reach out and let your lender know, the sooner they can talk you through any options that could be available to help you.

Thinking of searching for a credit card?

If you have poor or bad credit history, the thimbl Credit Builder Credit Card could help you build your score.
If approved, use your thimbl credit card to cover the cost of a purchase that you can afford to repay. Make at least the minimum repayment amount each month until your balance has been cleared. If you can, you should try to pay more than the minimum amount due.
Your repayment activity will be reported to the CRAs, and if you’ve also managed any other bills and existing credit commitments effectively, you could notice an improvement in your credit score over time.

Check your eligibility for a thimbl credit card with no impact to your credit score*

Find out if you’re pre-approved for a thimbl credit card in just 90 seconds.
You can check your eligibility for the thimbl credit card if you:

• Are between the ages of 18 and 70;
• Are a UK resident with at least 1 year's UK address history;
• Have a monthly net income of at least £800;
• Have an active credit account that has been open for a minimum of 12 months; and
• Do not already hold a Zable credit card.

Lendable Ltd is unable to consider applications from anyone who has declared bankruptcy or is in an Individual Voluntary Arrangement (IVA).

Credit score myth busters

Myth: Checking your credit score could harm it.

‘Does checking your credit score lower it?’ is a frequently asked question.
Don’t worry - you can check your credit score as many times as you like, and doing so will not affect it.

Myth: I don’t plan to apply for credit, so my credit score doesn’t matter.

While you might not anticipate needing to borrow money anytime soon, you could be hit with an unexpected expense and need to apply for credit. The better your credit score, the better your chances of being considered for credit.
It’s never too early to work on your credit score. Building credit takes time; it’s better to start as soon as you can.

Myth: Once you have bad credit, that’s it; it stays with you forever.

Bad credit doesn’t have to define your finances for life. Even if you have terrible credit history, you can still improve your credit score. Improving your credit score isn’t a quick fix, but by making a habit of the credit boosting tips included in this guide, you can start your journey today.

Myth: I’ve never borrowed credit or been in debt, so I should have a perfect credit score.

If you’ve never borrowed credit or paid bills in your name, you could have little-to-no credit history, otherwise known as having a ‘thin’ credit file.
While having a thin credit file isn’t exactly a bad thing, it could go against you if you were to make an application for credit. With no available evidence of how you’ve managed credit commitments in the past, lenders could view your application as a risk.

Myth: You can’t get a credit card with bad credit.

While your choices could be limited, you could still be considered for a credit card, even if you have bad credit history. Some credit cards, such as the thimbl Credit Builder Credit Card, have been designed to help those with bad credit move towards a healthier credit score.
It’s worth noting that if you have bad credit, you could be offered a higher interest rate. This is something you should take into consideration when working out whether you can afford to borrow and repay credit.

Are you worried about money?

If you’re concerned about your finances or debt, please know that you can access free, confidential advice through a range of charities and organisations such as StepChange, MoneyHelper, Citizens Advice, and National Debtline.

*The thimbl credit card is powered by Zable. Zable is a trading style of Lendable Ltd. If you choose to make a full application, a creditworthiness assessment will be carried out by Zable. This will consist of a hard search and a further check powered by Open Banking. A hard search will remain on your credit file for up to 12 months and multiple hard searches within a short period of time could have a negative impact on your credit score. Any credit obtained upon successful application will be provided by Lendable Ltd. Pre-approval does not guarantee acceptance.