How to Improve your Credit Score

Having a strong credit score is one of the best ways to secure car finance. It proves to lenders that you are financially reliable. The higher your score, the less risky you’ll seem to lenders.

Whether you’ve got an excellent, good, poor or bad credit rating, there are always ways to improve or maintain it – and we’ve picked out 15 of the simplest.

1. Registering to vote

We start with the easiest step of all. The Electoral Register is a list of the names and addresses of people registered to vote in public elections in Ireland. When you register to vote, your electoral details are recorded on your credit report. It helps lenders confirm your name and address, so your score increases.

2. Make current payments on time

Show lenders you’re reliable by paying all your loan, credit card and utility bill payments on time and in full. Well-managed accounts usually have a positive impact on credit scores.

3. Avoid the top end of your credit card limit

Try to keep your credit utilisation to around 30%. This is the percentage of your credit limit that you use. For example, on a card with a credit limit of €1,000 and you use €500, your credit utilisation is 50%. A lower percentage is likely to increase your score.

4. Use your overdraft sparingly

An overdraft appears on a credit report as debt. But if lenders see that you can stay within the agreed limit and are able to clear it on time each month, it proves you are a reliable borrower.

5. Keep credit applications to a minimum

Try to avoid applying for credit frequently in short spaces of time. It makes lenders think you rely too much on credit. It doesn’t matter what form of credit you apply for or the amount you require, each application’s search can be seen by lenders. It’s a good idea to space applications out.

6. Moving house

If you’ve moved house make sure all your bills are sent to your new address. If not, you may be receiving bills at an old address that remain unpaid.

Some lenders don’t like to see somebody who’s moved house too often, as they like to see stability in people’s circumstances.

7. Settle any credit disputes

Defaults on credit reports can cause problems. A default means the report shows you should have made a payment and didn’t. If you think the default is incorrect, it can be disputed. Check if the default shows up on the other credit reference agency reports.

If you think the dispute is an error, you could complain to the lender that put it there, complain to the Financial Services and Pensions Ombudsman (FSPO) or add a notice of correction. This would slow the process down, but if you can explain how the error has happened and that it’s not your fault, it’s worth doing.

8. Never round up time at an address

The more insight a lender has into your details, the better. Avoid rounding up time at an address, for example, don’t state two years and six months as three years. As most lenders only ask for three years’ address history, it should be easy to give the correct information.

10. Cancel some unused credit and store cards

Unused credit and store cards can have a big impact on your credit score. Access to too much available credit, even if it isn’t used, can hinder applications, so it’s a good idea to cancel some cards.

11. Avoid payday loans

Steer clear of payday – also known as short-term – loans if possible. Even though they may be tempting to choose in short-term financial emergencies, they are expensive and some mortgage underwriters state they reject people who have taken one.

12. Don’t withdraw cash on credit cards

Even without a credit score to consider, this is never a good idea. Withdrawing cash on credit cards is expensive due to the interest charged. Even if you do repay in full every month. Lenders can see this as evidence of poor money management.

13. Be honest about timing

Consider potential life changes when applying for credit. You score higher when earning, but, if you’re due to take time off for maternity leave or you fear potential redundancies where you work, remember to be honest. You’ll be more likely to get a loan before the change, but it’s also crucial to make sure you’ll be able to afford the repayments.

It’s worth remembering that big issues, such as county court judgements (CCJs) and bankruptcy, can stay on file for six years. If you’re nearing a time where an old issue will lapse, hold off.

14. Financially delink

If you split up with someone you had joint finances with, you don’t want their credit history to affect yours going forward. You can contact credit agencies and ask for a notice of disassociation. You would need to close joint accounts and pay off joint loans.

15. Check your credit report annually

It's a good idea to go through your credit report once a year or before any applications. They contain huge amounts of data on you and there could be errors. You will want to be aware of, and correct any, before applying.


What is a good credit score?

Each credit reference agency has its own scoring system.

They calculate it based on information sent by lenders about your credit and how you manage it. Once they have enough information they will generate a report.

What credit score do I need for car finance?

Whatever your credit score might be, CarLoans4u works with lenders that try to find you a deal. If your score is poor or bad, we may still be able to help. Start your application today and we will see if we can find you a deal.

Does applying for a car loan affect my credit score?

Applying for car finance with CarLoans4u won’t affect your credit rating. 

How quickly can I improve my credit score?

Some of the above actions can make a swift change to your score, others may take longer. As credit scores are decided by various factors, you may have to address a number of issues over some time to see a difference.

Why should I improve my credit score?

Improving your credit score is the most effective way of improving your chances of getting car finance and any other finance.