I tricked my credit score from good to excellent in three months

I thought my credit was perfect but was shocked when I was turned down for a new phone contract in October.

I pay off my American Express credit card in full at the end of each month, and if I get stuck in my overdraft, I cancel it quickly.

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Although I don’t have a mortgage or personal loan, I believed my credit file was in decent shape as I had never missed a payment.

In fact, my Experian credit score came in at a healthy 999 and I was rated Excellent.

However, my application for a new SIM-only contract with Vodafone through Carphone Warehouse was canceled within seconds of applying after the company ran an automated credit check.

Stupidly, I forgot that there are three credit reporting agencies – Experian, Equifax and TransUnion – and you have no idea which one lenders use.

Little did I know that Vodafone had run a credit check with Equifax, where my score was significantly lower.

My Experian and TransUnion scores are rated Excellent, but my Equifax score was only 755 out of 1,000 – which is a Good rating.

While lenders don’t have to explain why they’re rejecting you, this may have been one of the factors that led to my rejection from Vodafone.

How I turned my good grade into an excellent one

I was appalled – but there was a way to turn it around, and in just three months I had upgraded my Equifax rating of “good” to “excellent”.

I started my search online by simply googling “how to improve my credit score” but was inundated with general tips including making sure I was registered to vote and canceling accounts that I no longer have use.

Instead, I decided to try Loqbox, which promises to boost your score by up to 300 points over 12 months — but there’s a catch.

You’ll need to borrow cash, so you really should only do this if you’ve got your finances under control and you’re confident you can stick to the deal.

Loqbox loaned me £250 for 12 months – but the money remains locked in your online account.

During the year, you automatically pay back €20 per month to your Loqbox account by direct debit.

It then reports your successful repayments to all three credit bureaus – improving your credit score.

And after just three months of payment, my Equifax score went up 103 points – from 755 to 858 – and nudged me into the Excellent category.

Sarah Coles, personal finance expert at Hargreaves Lansdown, said of my success, “This is a brilliant example of how relatively small changes in your habits can make a really big difference in your score.”

“Your score could suffer if you don’t have a record of borrowing and paying back the money.

“It feels counterintuitive, but it can actually help you get a credit card or personal loan.”

Tom Eyre, co-CEO and co-founder of Loqbox, told me that 88% of Loqbox members improve their credit score within a few months.

Of course, this method also involves risks – like any form of borrowing.

Tom said that around 18% of Loqbox Save’s customers were unable to make refunds.

And not making a payment can negatively impact your credit score and decrease your chances of being accepted on cheap credit in the future.

However, if you are unable to repay, you can cancel your Loqbox Save account and get your money back without affecting your credit score – but you must do so before the payment due date.

Any Loqbox customers concerned about not being able to keep their repayment schedule should get in touch with the company via email or through the online chat service on their website.

Other ways to improve your score

There are a number of free and cheap ways to improve your credit score, including.

For example, being on the electoral roll proves who you are and where you live, which means it’s easier to get credit if you’re on the list.

You can opt in by registering to vote on Gov.UK.

It is also important that you do not make too many loan applications, because many requests in a short time can be taken as a sign of financial distress.

Use a “soft search” eligibility calculator to show how likely you are to be accepted – sites like MoneySavingExpert.com offer these.

You should always pay your bills on time. This is because late payments are also recorded in your file.

If you can try to reduce your existing debt before applying for a new loan as lenders may be reluctant to lend you if you already have a large amount of debt.

Using Credit Builder credit cards for small affordable purchases can show that you are a responsible lender and it can improve your chances in the eyes of lenders.

It’s important to ask yourself whether you actually need to take out a loan before deciding on a new credit card or personal loan.

If you cannot afford to pay off your current debt, you should definitely avoid taking on any more debt.