What affects your credit score?

Nov 07, 2018

Knowledge Hub / What affects your credit score?

Ranging from 0-999, your credit score is a number that gives a good indication of your financial circumstances. A credit score between 721 and 999 is a high credit score and would suggest that a customer has repaid debts in time, and therefore has a good repayment history in comparison to those with a low credit score – 720 and lower.

To improve the likelihood of being approved for a loan a consumer will try to keep a high credit score. This is important because the most attractive rates for loans, with the lowest interest rates, are only available for those with the best credit scores. Due to a  number of factors, your credit score will constantly go up and down.


Being signed up to vote in general and local elections can improve your credit score because it will confirm your address and identity. Because a credit score is used when applying for a loan or credit card, it helps the loan companies (lenders) to underwrite your application because you have a ready been confirmed as a real person by local authorities.


To have a healthy credit score it is important to have some sort of credit history. As soon as you turn 18 you are able to have a  credit score, but in a catch 22, you will have no credit history, making it tough for companies to determine your credit risk. Having a few accounts and cards will be good for this as it will build up your credit score and help you have a worthy score.


Having a high debt-to-income ratio or too many open loans can cause your credit score to decrease because it makes you look like you are financially stretched. If you have too many loans already open lenders could avoid giving you finance. For some types of loans, for example, payday loans, lenders might not be able to lend to individuals who already have a certain amount of loans.

Something to keep in mind when applying for a loan is that every time you do a lender might check your credit score leaving a ‘hard search’ or ‘footprint’ as your file is searched. Making too many applications in a short period of time will affect your score negatively as it shows that an individual is desperately in need of finance.


The single biggest factor that impacts your credit score is your ability to pay back credit card and loan repayments on time. No matter what type of loan – personal, debit or credit cards, or mortgages, if you keep up with payments it will help you keep your good credit score. On top of this, if you have a low credit score, making repayments on time will help you rebuild it.

On the flip side, not making payments on time will make you credit score fall. Because the information is distributed to credit reference agencies, any information that indicates you have missed repayments is automatically available for other lenders to see, and who will know that in the future you might not be in a financial position to take on further finance.


A County Court Judgement (CCJ)  is a legal preceding where your debt is written- off after it has been confirmed by the court.  A CCJ is visible on your account for up to 6 years, or until you pay off the total amount of the debt which then subsequently brings down your credit score. If you have ever been bankrupt it will significantly affect your credit score and will stay on your personal file for up to 10 years.


Having a spouse with a bad credit rating will not negatively impact your credit score, and neither will it increase it if it is higher. However, if you have a joint account or mortgage it will make you use the credit score of your partner. In this instance having a spouse with a low credit score might restrict your ability to obtain a loan, and especially one with the best rates.

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