What affects your credit score

Your credit score is a number that sums up how risky a lender thinks you are, built almost entirely from how you have handled borrowing in the past. Credit scoring is, in Citizens Advice's words, "a system used by creditors to decide how much of a risk it is to lend to you"¹. The main things that move it are your payment history, how much of your available credit you are using, how often you apply for new credit, whether you are on the electoral roll, and whether your file is financially linked to someone with a poor history.

Plenty of things people worry about do not count at all. Your income, your savings, checking your own score, getting debt advice and being made redundant do not directly change your score, though some of them change what you can afford to pay, which can affect it indirectly. Negative marks such as missed payments, defaults and county court judgments stay on your file for six years, after which they drop off automatically.

How a credit score works and what lenders use it for

When you apply for any form of credit, the lender checks your record with a credit reference agency before deciding. For a credit card, "the credit card provider will check your credit record with a credit reference agency, to see if you are credit worthy"⁷. For a joint mortgage, lenders go further and check each applicant individually: "Lenders will run a credit check on each applicant before granting a mortgage; if one party has a poor credit score, it could impact the lender's decision"⁸.

The score itself is a summary of the report behind it. That report holds your name, address and date of birth, whether you are on the electoral roll at your current address, how much you currently owe, late and missed payments, and public records such as county court judgments, repossession, bankruptcy or an IVA⁹. The Information Commissioner's Office, the data regulator, confirms agencies also hold details of your previous addresses and information from public sources such as the electoral roll, county court judgments, and bankruptcy and insolvency data¹⁰.

Two points are worth holding on to. First, the lender does not just see a number: it sees the underlying report and applies its own rules on top, so two lenders can reach different decisions from the same file. Second, the score is only about credit. A bad rating "can also affect your ability to rent a home, get a mobile phone contract or anything else that requires a credit check", as the Bank of England notes¹¹, which is why it reaches beyond borrowing.

Payment history carries the most weight

Nothing affects your score more than whether you have paid what you agreed, on time. Experian, one of the three main agencies, lists the ingredients of its score as your payment history including on-time and late payments, amounts owed, credit utilisation, credit applications, and public records like bankruptcy or county court judgments¹². Payment history comes first for a reason: it is the most direct evidence of how you behave with credit.

The rule bites across every kind of borrowing. Failing to pay debts, "whether secured or unsecured, can affect your credit rating"¹¹. Missed payments on a buy now pay later agreement "will show on your credit score and can make it harder to get credit in the future"¹³. If an account defaults, "your credit file will show that you did not make your agreed payments. This impacts your credit score"¹⁴. Even an unpaid household bill can appear: "if you don't pay a bill on time, this could affect your credit rating and will appear on your credit file"¹⁵.

Reduced payments count too. A debt management plan works by paying less than you originally agreed each month, and "a DMP impacts your credit score because payments are lower than what you agreed", so arrears build up and are recorded in the payment history¹⁶. The same logic applies to any informal arrangement with a lender.

The effect runs both ways, and that is the practical point. A good payment history builds your score steadily, and on joint debts "a good payment history towards joint debts helps both people named on the account and can make it easier to get credit in future"¹⁷. Every month paid on time is evidence in your favour; every month missed is evidence against you, and it stays for six years.

Credit utilisation: keeping balances below a third of your limit

Utilisation is the share of your available credit you are actually using. Which? gives the example: "a £1,000 balance on a £5,000 limit means you are using 20% of the available credit"¹⁸. The lower that percentage, the better your score tends to be.

The recommended ceiling varies between sources. Which? advises "keeping your balance below 30% of your total credit limit" to boost your score³. Advice NI's guidance is more relaxed, suggesting you "keep your credit usage low, ideally below 50% of your agreed credit limits"¹⁹. The stricter 30% figure is the one most often quoted for someone actively trying to improve a score; the 50% figure is a reasonable everyday ceiling. Both agree on the direction: high balances relative to limits count against you.

Overdrafts follow the same principle with an extra edge. StepChange warns "your credit rating can be affected if you often go over your overdraft limit [or] you owe too much on your overdraft"²⁰. Living permanently at the overdraft ceiling signals to lenders that you are stretched, even if you never miss a payment.

This is also why a higher credit limit does not automatically hurt. A bigger limit with the same balance lowers your utilisation percentage, which generally helps. The risk is behavioural rather than mechanical: more available credit makes it easier to owe more, and it is the resulting balance that does the damage.

Hard and soft searches: how applying for credit shows up

Every application for credit leaves a trace, but not all traces are equal. A hard check "involves a full search of your credit report and leaves a 'footprint' on your credit file that's visible to other lenders for at least 12 months"⁴. A soft search, by contrast, is used for eligibility checks and for checking your own file, and does not affect your score.

The reason hard searches matter is that several of them close together suggest you are hungry for credit. "Multiple hard searches, particularly within a short period, can lower your credit score"⁵. StepChange puts the same point more bluntly: "a lot of checks in a short amount of time can reduce your score"⁶.

This is where eligibility checkers earn their keep. When you apply for a credit card, "it will leave a mark on your credit file, so if you apply and you are rejected, it will" count against the next application, which is why providers offer soft-search eligibility checks that do not impact your score²¹. Checking your eligibility first, then applying only where your chances are good, avoids stacking up hard footprints from rejections.

The electoral roll, your address and proving who you are

Lenders use the electoral roll to confirm you live where you say you live. Your credit report records whether you are on the electoral roll at your current address⁹, and the agencies take that information from public sources¹⁰. Not being registered counts against you at every agency: Which? notes that "certain things will have a negative impact on your score regardless of the agency, for example, not being on the electoral roll"⁵.

Being registered also has uses beyond credit. When the government verifies identity for a Universal Credit claim, one accepted supplementary document is "electoral register confirmation that you live at the address"²². The same register that helps a lender match you to your address helps other organisations prove who you are.

Your address history matters in a second way. Previous addresses appear on your report¹⁰, and lenders use them to link your accounts together over time. Moving house does not wipe your file: your history follows you, and an address link you do not recognise can be a sign of an error or of someone else's activity on your file, which is one reason to check your report regularly.

Joint accounts and financial links to other people

Opening a joint account with someone creates a financial association between your credit files. MoneyHelper warns that "opening a joint account adds a financial link to the other person", so companies look at both credit histories, and a poor history on the other side might lower your chances of acceptance²³. The same applies to joint loans, mortgages and credit cards: "lenders can look at the other person's credit history when you apply for credit" even if you apply in your name only¹⁷.

The link survives both the account and the relationship. "Closing a joint account won't remove the link to the other person from your credit file", though you can ask the credit reference agencies for a 'notice of disassociation' if there is no other financial connection between you²³. After a divorce or separation, National Debtline confirms the association continues: if you have made a credit application in joint names or had a joint account or financial product, the link remains²⁴.

A joint mortgage is the biggest version of this. Taking one out "creates a financial link between yourself and your fellow co-owners. If one of you runs into financial problems, this could affect everyone else's credit rating, which could make it difficult for you to borrow in the future"²⁵. MoneyHelper's advice on joint accounts in general is to open one only with someone you trust, "as it could damage your credit score if they have poor credit and you could be responsible if they run up debt"²⁶.

If you later enter a debt solution, the association keeps working. A financial association "links your credit files. This means your record of making reduced payments may affect the other person's credit file [and] their ability to get credit"²⁷. The only reliable protection is to keep the link only where it is genuinely needed and to ask for a disassociation when it ends.

Things that do not lower your score

Several common fears do not match how scoring works. Checking your own score is the clearest one: "you can check your own credit score without hurting it"⁶. Getting advice is another. StepChange states plainly of its debt advice service that "there is no impact on your credit score" from talking to an adviser²⁸. Advice itself changes nothing; only the arrangements that follow, such as a debt management plan, do.

Negative equity, owing more on your mortgage than the home is worth, is also not automatically a problem. "Negative equity won't necessarily impact your credit score, unless you default on your payments or need to move house and cannot make up the shortfall"²⁹. The score records behaviour, not the value of your assets.

Redundancy and changes in income do not appear on your file at all, because the file records credit events, not employment or earnings. What can follow from redundancy, though, is missed payments if income falls, and those do appear. The distinction matters: the score does not know you lost your job, but it will know if a debt went unpaid as a result.

Moving house does not give you a clean file either. Your accounts and history follow you to your new address, linked by your address history¹⁰. Similarly, a change to a score shown by a particular service, such as Experian updating how it displays things, "does not affect your ability to get credit"⁶; lenders look at the report, not the cosmetic number.

Missed payments, defaults and CCJs: six years on your file

The six-year rule is the backbone of credit file timing. "Some information stays on your credit file for six years, like missed payments, defaults and court judgments"². National Debtline confirms the same list: "information such as missed payments, default notices and court judgments will generally stay on your credit file for six years"³⁰. Late payments, missed payments and defaults all follow this period³¹.

A county court judgment has its own timeline with one important escape route.

"A CCJ is recorded on your credit file for six years unless you pay it off immediately"³⁵. Paying within one calendar month keeps it off the file entirely; paying later leaves the entry, but it shows the debt as settled. A CCJ affects more than borrowing: it can impact your credit score, borrowing, renting and employment opportunities³⁵.

Nothing shrinks this window for accurate information. Even having a debt written off does not clear the record: "getting a debt written off will have a negative impact on your credit reference file and may affect your ability to obtain credit for up to six years", though "the balance shown on your credit reference file should be set to zero"³⁰. The six years run from the event itself, and the entries then drop off without you needing to do anything.

Why your score differs between Experian, Equifax and TransUnion

The UK has three main credit reference agencies: Experian, Equifax and TransUnion, formerly Callcredit¹⁹. Each holds its own version of your file, scores it on its own scale and grades it in its own words. Each score is "a three digit number and is accompanied by a word grading", and the grades run from excellent through very good, good and fair down to poor and very poor¹⁹.

Because the scales differ, the same person can hold three different numbers at the same time, all describing the same underlying history. One agency's score may be shown as "a number from 0 to 1,000"² while another uses a different maximum entirely. The number is not comparable between agencies; the grade is the more useful guide, and even that is only a summary of the report.

Access differs too. Experian offers its score through its own service, including a daily credit report via CreditExpert¹², while "your TransUnion credit score is available through Credit Karma, and your Equifax credit score is available through their website or partners like ClearScore"¹². Free routes to all three exist, so checking all three before a major application such as a mortgage is straightforward and costs nothing.

The underlying factors, though, are the same everywhere. Not being on the electoral roll or making a late payment "negatively impact your score regardless of the agency"⁵. Improving your history improves all three scores, even if the numbers move by different amounts.

How to improve your score and fix mistakes on your report

StepChange's list of what improves a score is short and practical: pay back any credit you have borrowed, register on the electoral roll, check your credit report to make sure it is correct, and make sure your file is not linked to somebody with a poor credit score³⁶. Each maps directly onto a factor above: payment history, the electoral roll, accuracy and financial associations.

Checking the report matters as much as checking the score, because the score is only as good as the data behind it. Errors on a report feed through into every application. Where information is wrong, you can raise it with the credit reference agency, which must investigate; the guide to correcting your credit report covers the process, and a Notice of Correction lets you add a short explanation of an entry.

Improvement is slow rather than instant, because the score is built from history. New good behaviour takes time to outweigh old bad marks, and the oldest marks drop off on their own six-year schedule. The fastest gains usually come from fixing errors, registering to vote and bringing utilisation down, since those can change within weeks.

Renting and jobs: who else checks your file

Landlords and letting agents run credit checks on prospective tenants, but within limits. "Landlords and agents can only run a credit check with your permission", and "a credit check does not affect your credit score"³⁷. In Scotland the rule is stated in law-facing guidance: "they can only check your credit rating if you give them written permission"³⁸.

What the landlord sees is limited. The check "does not tell landlords if you have missed rent payments", though some landlords might check landlord referencing databases separately³⁷. A poor credit history can still cost you a tenancy, since a bad rating affects "your ability to rent a home, get a mobile phone contract or anything else that requires a credit check"¹¹, and some landlords may not rent to you at all if you have bad credit.

Employers can also check credit files for certain roles, with your consent, and a CCJ on your file can affect employment opportunities³⁵. In every case the check needs your permission, and it leaves no mark of its own on your score.