What affects your credit score?
Key takeaways
Timely payments boost your credit score, while late or missed payments can lower it significantly
Using a high percentage of your available credit can negatively impact your score
A longer credit history and a mix of credit types (e.g. credit cards, loans) can positively influence your score
Checking your score, income changes, and personal information don’t affect your credit score
What affects my credit score?
Several key factors affect your credit score. The most significant is your payment history, which shows whether you’ve paid your bills on time – late or missed payments can lower your score.
Your credit utilisation ratio, or how much of your available credit you’re using, also plays a big role; keeping it below 30% is generally recommended.
The length of your credit history matters too, with longer histories often boosting your score.
Additionally, the types of credit you have (such as credit cards, car loans, or mortgages) and how often you apply for new credit can impact your score. Hard inquiries from too many credit applications in a short period may temporarily lower it.
Factors that affect credit scores
Payment history
Payment history is one of the most important factors affecting your credit score. It shows whether you’ve made repayments for bills, loans, and credit cards on time. Lenders see this as a key indicator of how reliable you are at managing debt. If you consistently make payments on time, it builds trust and helps boost your credit score.
However, missed or late payments can have a negative impact. Even a single missed payment can lower your score and stay on your credit report for up to six years. The more recent and severe the missed payments, the more damage they can do.
Being on the electoral roll
Being on the electoral roll (or electoral register) at your current address positively affects your credit score because it helps lenders verify your identity and address. This added level of verification makes you appear more stable and trustworthy to lenders.
If you're not on the electoral roll, it can make it harder for lenders to confirm your identity, which might lead to delays or even rejections when you apply for credit.
Debt management
Debts can have both positive and negative effects on your credit score, depending on how they are managed.
If you borrow responsibly, by making payments on time and keeping balances low relative to your credit limits, debt can help build a strong credit history and improve your score.
However, debt becomes a problem when it's not managed properly. High levels of debt, especially if you're using a large percentage of your available credit (known as high credit utilisation), can lower your score.
Length of credit history
Generally, a longer credit history gives lenders more information to assess your borrowing habits and reliability. If you’ve had credit accounts open for many years and have a consistent record of on-time payments, it can boost your score by demonstrating financial stability.
On the other hand, a short credit history or frequently opening new accounts can make it harder for lenders to judge your creditworthiness.
Credit mix
If you have shown you can handle different types of credit, this can give your credit file a significant boost.
Having different types of credit (like a credit card, loan, overdraft or mortgage) and managing them well also shows lenders that you can handle borrowing responsibly.
Credit utilisation
Credit utilisation is the percentage of your available revolving credit that you're using. For example, if you have a credit card limit of £5,000 and a balance of £1,000, your utilisation is 20%.
A high ratio can suggest you're relying heavily on credit and may affect your credit score. Keeping utilisation low can help, but there's no universal threshold that guarantees a good score. Credit utilisation applies to credit cards and similar revolving credit, not loans or mortgages.
New credit applications
When you apply for credit – like a loan, credit card, bank account, or mortgage – the lender will check your credit report to assess your risk. This check leaves a hard inquiry on your report, which can temporarily lower your score by a few points because it suggests you might be taking on new debt.
Having too many credit applications in a short period can make you appear financially unstable or desperate for credit, which may further lower your score and make financial providers more cautious.
Joint accounts
Opening a joint account can affect your credit score if it creates a financial association with another person. This usually applies to joint credit accounts, such as loans or current accounts with an overdraft, rather than joint savings accounts. If you're financially linked, lenders may consider the other person's credit history when assessing your applications.
A joint account doesn't automatically lower your score, but if the other person has a poor credit history, it could affect your ability to get credit. You can ask credit reference agencies to remove a financial association if you no longer share joint finances.
What types of credit can affect my credit score?
Several types of credit and financial agreements can affect your credit score, depending on how you manage them and whether the provider reports information to credit reference agencies.
Credit cards: Your payment history and how much of your available credit you use can affect your score
Personal loans: Missed or late repayments can harm your score, while your repayment history may help demonstrate responsible borrowing
Buy Now, Pay Later (BNPL): Some providers report repayment activity to credit reference agencies, and missed payments or hard credit checks may affect your score
Current accounts with overdrafts: How you use your overdraft and whether you repay what you owe can affect your credit record
Mortgages: Your repayment history is important, and missed payments can negatively affect your credit score
Car finance: Making repayments on time can help maintain a positive credit history, while missed payments can have a negative impact
Mobile phone contracts: Some contracts involve a credit check, and missed payments may be reported to credit reference agencies
Store cards and retail finance: These can affect your score through your repayment history, credit applications and outstanding balances
What is a credit score?
Your credit score is a number that reflects how likely you are to repay money you borrow, based on your past financial behaviour.
It is used by lenders, such as banks and credit card companies, to help them decide whether to offer you credit and on what terms. A high credit score makes it easier to borrow money at affordable interest rates.
There is no universal credit score in the UK. Each credit reference agency – Experian, Equifax, and TransUnion – uses its own scale and scoring system. Scores typically range from “very poor” to “excellent,” with a higher score suggesting you are a lower-risk borrower.
Maintaining a strong credit score can help you access better credit deals, lower interest rates, and improve your chances of being approved for loans, mortgages, or mobile phone contracts.
How is it calculated?
Your credit score is calculated using information from your credit report. This includes details such as:
Your payment history
How much credit you’re using compared to your limits (credit utilisation)
How long you’ve had credit accounts
Whether you’ve had any defaults, County Court Judgments (CCJs), or bankruptcies
You can find out more with our guide to how credit scores are calculated.
Why is it important to know my credit score?
Knowing your credit score is important because it gives you a clear picture of your financial health and how lenders are likely to view you. Your credit score affects your ability to get approved for credit cards, loans, mortgages, mobile phone contracts and rental agreements.
A higher score can help you access better deals, including lower interest rates and higher credit limits, saving you money in the long run.
Understanding your credit score also allows you to spot issues early, such as errors on your credit report or signs of identity fraud.
By keeping track of your score, you can make informed decisions about your finances and take steps to improve your credit if needed. This can be especially important if you're planning a big purchase – such as taking out a mortgage – or applying for credit in the near future.
If your credit score is low, don't despair. It's important to start understanding why this is the case and begin taking steps to improve it. This knowledge puts you in a stronger position when applying for credit in the future.
What are the benefits of a good credit score?
The benefits of having a good credit score include:
Better rates on borrowing: Lenders are more likely to offer you competitive interest rates if you have a good credit score. This can result in significant savings over time
Easier approval for mortgages: A high credit score can make it easier for you to get approved for a mortgage, and at a better interest rate
Cheaper car insurance: Some car insurance companies consider credit scores when determining premiums. A good credit score may result in lower insurance costs. Additionally, a good credit score can give you more options for car finance and car loans
How can I check my credit score?
You can check your credit score directly with any of the three UK credit reference agencies: Equifax, Experian and TransUnion. Each of the credit bureaus has their own scoring system.
Alternatively, you can also check your credit score for free with our Credit Score service that uses information from TransUnion to calculate your credit score. MoneySupermarket’s Credit Score service gives helpful, personalised hints and tips on how to boost your rating.
What doesn’t affect my credit score?
There are several myths about factors that do and do not affect your credit score.
The following will not impact your score:
Checking your credit score
Your salary or profession
Your savings
Student loans
Your marital status
Your address
Do soft credit checks affect my credit score?
Soft credit checks, often used for eligibility checks and quotes, don’t affect your credit score and aren’t visible to potential lenders reviewing your credit report.
Instead, they let providers assess your eligibility without leaving a footprint that other lenders can see. Hard credit checks, usually carried out when you formally apply for credit, can appear on your report and may temporarily lower your score.
Does moving house affect my credit score?
Moving house doesn’t directly affect your credit score, but it’s important to update your address with your bank, lenders and credit reference agencies.
If you’re not registered to vote at your new address, this could also affect your credit profile. Keeping your details up to date helps lenders verify your identity and assess your credit applications accurately.
How can I improve my credit score?
There are lots of ways to boost your credit score. Here are a few tips:
Register on the electoral roll: If you’re currently not on the electoral roll, or you’re moving house, make sure you register or re-register as soon as possible.
Review your credit report: Regularly check your credit report for errors and dispute any inaccuracies.
Pay bills on time: Timely payments are essential for maintaining a good credit score – setting up direct debits will ensure you don’t miss payments.
Build your credit history: If you’ve not applied for credit before, a credit-builder credit card could help and start you on the path to a stronger credit rating.
Close unused credit card accounts: Keeping unused credit card accounts open can negatively impact your credit score.
Senior Content Editor
Our expert says...
Your credit score is influenced by several factors, from your payment history and how much of your available credit you use to how long you’ve had credit and how often you apply for it. There’s no single magic number or quick fix, but paying bills on time, keeping balances manageable and checking your credit report regularly can help you build a stronger credit history.
Check your credit score
It’s quick and simple to check your credit score online using our free Credit Score service. We suggest checking your credit score regularly, in the same way you might with your bank statements or utility bills.
Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
Reviewer
Alan Cairns
Senior Content Editor
Alan breaks down money, home, and energy topics into plain English to help you save money. Ask him about pound cost averaging or Balkonkraftwerk.
