What affects your credit score?
Your credit score can be affected by many things, so we asked our experts for their take on the matter.
One thing in particular that you may not expect, is something Becky highlights for us here: "You may think that if you have never borrowed before that this would look good, but this isn't actually the case. What it actually means, is that there is no good evidence that you will be able to pay back what you borrow well and so it will sometimes count against you."
We spoke to Richard about the common things that he sees affecting credit score every day, and as he explains, there are many factors at play. Below, he tells us what is most likely to affect your credit score:
- Signing up to the electoral role – this is easy to do and lets lenders know you have a permanent address.
- Making too many credit applications over a short period of time – this can harm your credit score even if you don't go through with the loan.
- Putting your name on household bills – if you live in a house with other people, put your name on bills such as your gas/electric or TV package. It doesn't negatively affect your credit file not to, but doing so works in your favour and could help you have a higher credit score.
- Paying your bills on time – this is vitally important, so make sure your payment dates work in conjunction with your pay day. Even paying late by a few days each month can lead to a poorer score.
Pauline further echoes this final statement, flagging missed and late payments (of any kind) as a main factor that will affect your credit score: "You should think of your score as a report card on your financial behaviour. Not fulfilling your financial obligations is the worst thing you can do to your credit score."
Ultimately, a good credit score can differ between different credit reference agencies, but that doesn't mean you can't be in control. By asking for your credit score from the common credit reference agencies – and knowing what can positively and negatively affect your credit score – you can be sure that you always know where you stand.