an image showing a credit report in the background alongside credit related images (credit cards, wallet, loan application), and also showing a graph on an upwards trajectory

How Can I Understand My Credit Score Better?


In today’s financial landscape, a good credit score is your passport to better opportunities. Therefore, whether you’re planning to buy a house, apply for a loan, or even secure a new job, a good credit score opens doors. In this guide, we’ll explore effective strategies to boost your credit score and maintain it for a prosperous financial future. At Indigo our mortgage team deal with clients all over the UK, particularly in Scotland in the Glasgow and Lanarkshire areas. When servicing our clients it is imperative that someone has a good understanding of their credit situation as a starting point in their journey. As a reminder anything showing on your credit score will remain there for 6 years, assuming it was not added in error.

Why Does Your Credit Score Matter?

Your credit score is a numerical representation of your creditworthiness eg. your score is 700 out of 1000 this basically translates to a lender saying if you take a credit agreement you are likely to pay it back 700 times and miss or default on payments 300 times. Lenders, employers, and even landlords use it to assess your financial reliability. As a result, A higher score not only grants you access to favourable interest rates but also reflects responsible financial behaviour. If looking to take out a mortgage in the future it is important to understand your credit score and have it work to your advantage. For instance, you can use Check My File who offer free trials to get access to your report from various agencies, including Experian and Equifax.

Understanding the Components of Your Credit Score

1. Payment History

Timely payments make up a significant portion of your credit score. Set up automatic payments or reminders to ensure you never miss a due date. Remember, even missing payments by a few days could be reported on your file and cause a negative impact. the longer you miss payments for will lead to reported arrears and eventually default.

2. Credit Utilization

Aim to keep your credit card balances below 70-75% of your available credit limit. This demonstrates responsible credit usage and positively impacts your score. Therefore, exceeding these thresholds can indicate to lenders you are struggling to manage your finances effectively.

3. Length of Credit History

The longer your credit history, the better. Avoid closing old accounts, as they contribute to the overall length of your credit history. For younger people looking to borrow it is worth noting your score may be low in starting out which can be attributed to a lack of credit history as opposed to any adverse information being held.

4. Types of Credit in Use

A diverse mix of credit, such as credit cards, loans, and a mortgage, can positively influence your report. However, only acquire credit you genuinely need. Similarly, any credit you do acquire make sure to pay on time.

5. New Credit

Additionally, opening multiple new credit accounts in a short period can be seen as risky behavior. Apply for credit only when necessary to avoid unnecessary inquiries. also be cautious of running price comparisons on websites as depending on the product type this can lead to multiple credit checks being undertaken in a short space of time by providers you have consented to receiving quotes from.

Strategies to Improve Your Credit Score

1. Check Your Credit Score Regularly

Regularly review your credit report for inaccuracies or discrepancies. Report any errors promptly to the credit bureaus to ensure an accurate reflection of your financial history.

2. Pay Down Outstanding Debts

Prioritise paying down high-interest debts. Therefore, consider structuring your repayments in a way that the highest interest debts are repaid first which should accelerate your progress to reducing and removing your debts completely. Furthermore, If you’re facing financial challenges, don’t hesitate to negotiate with your creditors. They may be willing to adjust your payment terms or settle for a reduced amount.

3. Register on the Electoral Roll

Credit agencies ability to positively identify a person will help improve and mantain your credit report. By adding your name to the electoral register this can add points immediately to your total once picked up by agencies which can be a welcome boost.

4. Build a Stronger Financial Foundation

Focus on building an emergency fund to avoid relying on credit during unexpected expenses. A stable financial foundation contributes to responsible financial management. Moreover, a healthy financial reserve will ensure you only take credit when needed which will in turn make it easier to manage responsibly.

Maintaining a Good Credit Score

1. Create a Budget and Stick to It

A well-planned budget ensures that you allocate funds responsibly, preventing overspending and potential financial strain.

2. Set Up Account Alerts

Most financial institutions offer account alerts via text message for various activities, such as low balances or large transactions. Therefore, use these alerts to stay informed and promptly address any issues. Insufficient funds can lead to returned direct debits which in return will report unfavourably on your report.

3. Be Mindful of Credit Inquiries Affecting your Credit Score

Limit the number of credit inquiries, especially if you’re planning a major financial decision like a mortgage. For instance, too many inquiries within a short period can negatively impact your score.


Improving and maintaining your credit report is a journey that requires commitment and strategic financial decisions. By understanding the factors that influence your credit score and implementing effective strategies, you can unlock a world of financial opportunities and work towards securing a mortgage in the future (check out our other articles for other hints and tips). Remember, your credit score is a reflection of your financial responsibility -nurture it wisely.