Rebuild your credit score by paying your rent on time - plus four more tips

A Debt Management Plan (DMP) can make a hugely positive difference to your life. But like any debt solution, it has a negative impact on your credit score.

If you are getting close to the end of your DMP you might be thinking about improving your credit score once it ends, so you can borrow again, perhaps even get a mortgage and get on the housing ladder. There are a number of steps you can take to do this: we’ve put together some tips to help you get started.

score

Step 1: Find out where you’re starting from


You can check your credit report for free with each of the agencies: Call Credit (via Noddle), Experian and Equifax (via Clearscore).

Remember, they may all have different information, so it’s worth checking them all to ensure that the details they hold are correct. The debts you have paid back in full through your DMP should show as ‘debt satisfied’. Any debts that you settled for less than the total owed may be marked as ‘settled’ instead. If some details are wrong, you can contact the agencies to get them corrected.

Don’t forget that your credit report will change every month: information is only held for six years, so every month some old information will drop off and a new month’s data will be added. So your score could start improving in a matter of weeks if you follow the steps below.


Step 2: Make sure you - and your documents - are registered to the right address


Make sure you’re on the electoral roll. Lenders will check this as part of their fraud checks on your identity and address. You should also ensure that your passport and driving licence are both registered at your current address.


Step 3: Make your rent and bills work for you


Until recently, your rent didn’t count towards your credit score. That’s all changed: read our advice on how to make sure your rent payments are included – but remember that it will only help you improve your credit score if you pay your rent on time and in full each month.

Some utilities companies also report your bill payments to credit reference agencies. You can find details of which ones do so under 'Utility bills' here.


Step 4: Show you can use credit responsibly


There are 2 main ways to do this:

- Make all your ongoing payments on time.

- Manage your bank account responsibly. Stay within your overdraft limit and make sure you have enough money in your account to cover outgoing payments.

Taking out a credit card can also improve your credit score as long as you use it carefully. Lenders want to know that you can borrow sensibly and responsibly. Once your DMP has ended and you feel you are ready to take out credit again, you could take out, for example, a credit builder credit card. This could improve your credit score if you keep the balance as low as possible (under 50% of the limit is best), pay off the balance in full every month, and make your payments on time.


Step 5: Take care when applying for credit


Whenever you apply for credit, this is recorded on your credit report. If you are turned down for credit, or if you make many applications in a short period, this will suggest to lenders that you’re struggling financially.

Some lenders can perform a ‘smart search’ or ‘QuickCheck’, to check if you’re eligible for their product without leaving a mark on your credit file.

However, the best way to keep your credit record looking healthy is to use the budgeting skills you developed during your DMP. That way your essential payments will be covered every month, and you may be able to build up savings - so you won’t have to rely on credit.

Rebuilding your credit history won’t happen overnight. But stick at it, and before too long you’ll have the credit score you need to reach your financial goals.

Need expert help with your debts? Complete our form to request a callbackRequest a callback
  • 0161 669 8925
  • 0161 669 8925

Articles home

Top of page

What solutions are available?
Complete the form and our friendly advisor will call you back to discuss the best way forward.

Your total debt?

£2,000

Just a few more details before we calculate your results

Go to final step
Go to final step

We just need a few more details

Please remember, the form above is just an information tool. One of our advisors will be in touch to answer any questions you may have and offer you more personalised advice on how to resolve your debt problems.
About us

We've been helping people get out of debt for almost 20 years. Read more about what we do and the charities we support.

Read more
Fees & key info

Read more about the fees involved with each of the solutions we provide.

Download the Insolvency Service guide to dealing with creditors.

Read here for information about our Complaints Procedure and referring a complaint to the Financial Ombudsman Service.

Conditions Apply. Repaying your debt over a longer period of time can increase the total amount to be repaid. Your ability to obtain credit will be affected. Fees are payable when continuing service is provided.
Our awards GP Award

Every month we help 1000s of people to get out of debt. We are proud of the service we provide and of the awards we've received.

Read more
Top 5 tips for
beating debt

Read our top 5 expert tips on how to beat debt and deal with your lenders.

Read more