Credit Score – What Affects It?

Credit Score – What Affects It?

No such thing exists as a ‘credit blacklist’. Instead, each lender you apply to will conduct its own assessment to determine whether to offer you credit. However, having a poor credit history will increase the likelihood of being turned down when applying to borrow money, credit card, mobile phone contract, or mortgage.

It’s never too late to improve your credit score, and we’re here to assist every step of the way.

Credit Score & Report Evaluation – Potential Creditor

When you request a credit facility, such as a credit card or loan, the initial action the creditor takes is to review your credit report. Your credit report contains all the essential information about you and your financial background. It includes your current and past addresses, open credit accounts, and any issues with repaying debts in the past.

Failure to adhere to the terms of your original credit agreement will reflect on your credit report. For instance, late credit card or loan repayments, or missed payments entirely, will impact your ability to borrow in the future. Similarly, declaring bankruptcy, entering an Individual Voluntary Arrangement (IVA), or having a County Court Judgment (CCJ) made against you will negatively affect your creditworthiness. Even making only the minimum credit card repayment monthly can have adverse effects on your credit report, as it might indicate to lenders that you’re struggling to clear your debts.

Lenders always aim to recover their money, so to improve your chances of obtaining credit, your report needs to demonstrate that you can manage loans and credit products responsibly.

credit score – what affects it

Causes of Continuous Poor Credit Score & Report

Missed Repayments

Late payments, missed payments, or paying less than required by your credit agreement are all recorded in your credit history.

While late repayments won’t ruin your credit score, they serve as a warning sign for creditors and should be avoided to enhance the chances of your credit applications being accepted.


Consistently late repayments for three to six months may lead your creditor to issue a default notice. This typically involves a formal letter instructing you to repay your debts. Default notices are a legal requirement for creditors to terminate your credit agreement and initiate debt recovery proceedings.

Defaults carry significant weight as they indicate your credit trustworthiness and are among the first things potential lenders assess. Whether it’s a mobile phone bill or a mortgage, defaults on credit accounts leave a mark on your payment history for six years.

Formal Debt Solutions – Bankruptcy, IVA, and DRO

Debt solutions listed on your credit report show that you’ve taken steps to manage your debts but also suggest a risk to lenders. IVAs, DROs, or bankruptcy listed on your report will lower your credit score.

IVAs and bankruptcy affect your credit score for at least five to six years, remaining on your report even after completion. Debt solutions like DMPs are marked against defaulted accounts, visible to lenders although not directly affecting your score.

Lack of Credit History

Having never taken out a credit card or loan also impacts your credit rating. In such cases, credit reference agencies lack information to determine your reliability in repaying borrowed money.

If you lack credit history and have a low score, consider obtaining a small credit card and consistently paying it off in full. Many manage this by using the card for household shopping and clearing the debt monthly to demonstrate responsible money management.

Minimum/Maximum Credit Limits Usage on Credit Cards or Store Cards

Available credit refers to the unused borrowed money accessible to you. Unused credit can make lenders uneasy, presuming you plan significant future purchases.

If you have a credit card you don’t use but maintain timely repayments and a large available credit, consider canceling it to potentially improve your score. If you’ve maxed out credit limits, paying a lump sum to reduce your debt balance is advisable to avoid extended repayment periods, high interest, and payment default risks.

Electoral Roll and Voter Registration Updates

The electoral roll confirms your current and permanent address, as well as past residences and credit history. Not being listed on the electoral roll can impact your credit score negatively.

Registering to vote is straightforward; if you’re not on your local electoral roll at your current address, register promptly to rectify this.

It’s a legal requirement to register to vote; failure to comply when requested by your local electoral registration office could result in fines or legal consequences.

Excessive Credit Applications

There’s no limit to credit applications, but numerous applications can lower your score. Each application leaves a mark on your credit history.

For non-credit products like insurance, soft searches occur that don’t affect your score. Some mortgage lenders conduct soft searches during assessment.

Joint Account Holder Impact

Opening a joint account with someone with a poor credit history isn’t advisable. Joint accounts lead to co-scoring, where one’s actions affect the other’s credit score.

Joint account holders are jointly responsible for debts; overdrafts or defaults can affect both parties’ credit scores and financial liabilities.

Credit Types

When scoring your credit, agencies prefer non-mortgage credit over mortgage products due to lower risk. Non-mortgage credit boosts your score more over time. An overdraft, rarely used, proves repayment ability.

Mortgages initially impact credit but improve with regular repayments. Maintaining good credit requires time, patience, and careful financial decisions.

Effects of Minimum Credit Card Payments

Credit History Length

Long, well-managed credit histories favor your score, showing you handle credit responsibly.

What’s on My Report? Various factors impact your score:

Utility Bills: Payments to water, gas, electric providers count.
Mortgages (Personal and BTL): Major credit items showing payment history.
Personal Loans (Secured and Unsecured): Loan details affect your score.
Credit Cards: Repayment history is visible.
Hire Purchase Agreements: Finance deals with repayment plans are listed.
Mobile Phone Contracts: Repayment history influences your credit.
Buy Now, Pay Later Agreements: All financial contracts are listed.

Refused Credit?

If your credit application is rejected, you aren’t entitled to know the exact reason why. If the decision is based on data from a credit agency, the lender must only confirm this and provide agency details. They don’t have to give more specifics. If you believe the rejection was unjust, you can appeal with additional information. If you’re still unable to secure the credit you sought, avoid applying for more credit right away, as this can compound issues. Instead, focus on reviewing your credit report and enhancing your credit score before seeking loans elsewhere.

What Doesn’t Affect Your Score?

Several factors don’t impact your credit:

  • Age
  • Ethnicity
  • Salary
  • Occupation
  • Employment History
  • Student Loans
  • Address
  • Marital Status
  • Religion
  • Children
  •  Informal Debt Solutions


Check your credit report, improve your score, and then apply for credit. Use credit referral agencies for reports and updates. Call for debt assistance.

Feel free to reach out to us at 0203 318 0990 for a complimentary and private debt consultation. Acme Credit Consultants Ltd is authorized by the Financial Conduct Authority (FCA) to provide tailored debt advice for your specific financial challenges.

For inquiries, you can also contact us at 0203 318 0990 or 0208 568 9687.


  • Rajnish Tyagi

    Rajnish Tyagi possesses certification as a qualified debt advisor and specializes in writing about debt management and related topics. His aim is to assist individuals in comprehending and effectively managing their debts and credit issues. Additionally, Rajnish Tyagi holds the position of managing principal at "Acme Credit Consultants Ltd," an FCA regulated firm that provides tailored debt solutions to both individuals and businesses facing financial challenges.

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