ROT Lending

Loans and finance advice.

Should I get a Loan to Improve my Credit Score?

Improving our credit score can be really important especially if we want to rent a property, get a mortgage or take out some other sort of borrowing. There are lots of reasons though, why our credit report might not be as good as it could be. It could be that we are self-employed or have a low income. It could be that we have had debts in the past or a CCJ. It could be that we are not staying on top of our debts or that we have never been in debt at all. If the last is true, then you may feel that if you get a loan and then repay it, it could show that you are less of a risk to lend to.

Problems with getting a loan

Although it could seem that getting a loan via the likes of and showing you can repay it is a great way to prove you are reliable it can be a risk. Firstly, if you have a poor credit record then you may not have many loans available to you. Lenders see you as a risk and so will charge you a lot of money for the loan and so you have to decide whether you think it is worth paying all that money. You also have to think hard about the risk. By taking a loan you are taking a risk that you may not be able to repay it. You may feel extremely confident that you will be able to repay it but you never know what might happen. There may be a problem and you may need money and it may leave your short in repaying the loan.

It is also hard to know what influence that loan might have on a lender. They may feel that you are more at risk as you had to borrow money, particularly if it was a loan that did not require a credit check. They may not see the fact that you repaid it as a positive but just look at the negative side; that you needed to borrow the money. This may depend on the type of loan as if you manage to get a credit card or store card then repay the full balance each month, this would be seen differently compared to you getting a payday loan.

Other alternatives

There are other things that you can do in order to improve your credit rating. It is important to start by making sure that your credit report is correct. It is sometimes possible that there is incorrect information on there which is making it look a lot worse than it should. So, if there is a problem you can get it corrected and then your credit report will look a lot better.

You can also improve it in other ways. For example, if you have bills in your household, such as utilities which your name is not on, but they are paid up to date, then get your name added to them. This will then show on your credit report and it will illustrate that you have responsibility for a bills which get paid on time.

Alternatively, if you are jointly named on things with someone who has a poor credit report, CCJ’s or unpaid debts then this could work against you. So, if this is the case then see whether you can have their name taken off the bill or it is changed to being just in their name.

Increasing your income or having a more secure job could also help you to get a better credit score. This can be quite tricky but it will advantage you in other ways as well and so it can be something which is worth considering.


So it can be a good idea to be really sure before you take out a loan to improve your credit rating. Make sure that the credit record is correct first and think about whether there are alternative things that you can do which will improve things more than getting a loan. You also need to think really carefully about whether a loan will really give the right message and if it actually will improve your credit score. Lastly, you will need to think about whether taking a loan is too risky. It will be something that will make your credit record worse if you cannot repay it and therefore you need to be extremely careful when deciding whether to take one out. Make sure that you do not make a decision too quickly as you could end up regretting it. It can be worth talking it over with a few people and doing more research about improving your credit score before deciding what might be the best thing that you could do to improve it.

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