Does Universal Credit affect your credit score in the UK?

If you’re receiving Universal Credit – or thinking about applying – you might be wondering if it will show on your credit report and impact your credit score.  

So, let’s look at what Universal Credit is, what it means for your credit health, and how you can keep things in check.  

What’s Universal Credit? 

Universal Credit isn’t a form of ‘credit’ in the sense of borrowing money. It’s a government benefit designed to support people who are on a low income, out of work, or unable to work. It replaces several older benefits, including Jobseeker’s Allowance, Housing Benefit, and Working Tax Credit. 

It’s paid monthly and is intended to help with living costs. You can apply for it whether you’re employed, self-employed, or unemployed. 

Does Universal Credit appear on your credit report? 

No, it doesn’t. 

Universal Credit itself doesn’t appear on your credit report, and it won’t directly affect your credit score. That means lenders can’t see whether you’re receiving it, and it won’t count for or against you when they review your application. But keep in mind – if you’re receiving Universal Credit, it likely means you have a low income, which will make it more challenging to be given the green light by lenders during affordability tests.  

Nevertheless, if you’re worried that simply claiming Universal Credit might damage your credit score – rest assured, it won’t. 

What can affect your credit score? 

While Universal Credit won’t impact your credit score, there are other things to watch out for that could lower your number.  

Here are a few examples: 

1. Missed or late payments 

It’s important not to miss a payment on your credit card, loan, or utility account. Any missed payments will appear on your credit report and could lower your score. They’ll also stay on your report for six years from the date of account closure.  

2. Increased credit usage 

If you’re relying more on credit to get by – like by using an overdraft or maxing out a credit card – your credit utilisation rate goes up. Using too much of your available credit can signal financial stress to lenders and may lower your score and your chances of being accepted for further credit.  

3. Applying for too much credit 

Making a lot of credit applications in a short period can lead lenders to see you as higher risk – it could look like you’re dependent on credit. Each application leaves a ‘hard search’ on your report, and too many in a short time can bring your score down. 

4. Falling behind on rent or council tax 

While rent and council tax payments don’t always appear on your credit report, if you fall behind and the debt is passed to a collection agency or results in a County Court Judgment (CCJ), that will show up – and it can significantly lower your score. 

What lenders could see 

Your credit report doesn’t show your income, your job title, or whether you’re receiving benefits. What it does show is your credit history – including how reliably you’ve paid back what you owe. 

That’s why it’s so important to keep your credit health in good shape, even if your income changes. 

How to protect your credit score 

We know that managing money on a tight budget isn’t easy. But there are a few simple steps you can take to keep your credit score steady – and potentially improve it – even if your circumstances change. 

1. Check your credit report regularly 

Keep an eye out for mistakes. Errors like an incorrect address, a payment marked late when it wasn’t, or an account wrongly showing on your report that has negative markers, can drag your score down. With Checkmyfile, you see your data from the UK’s three main credit reference agencies – Experian, Equifax, and TransUnion – in one place. That means you’re more likely to spot issues early, and our customer care team will be on hand to help you.  

2. Make minimum payments 

Even if you can’t pay off your full balance, making the minimum payment on time helps protect your score and could improve it over time. Setting up direct debits can make this easier to manage. 

3. Register to vote 

Even if you don’t intend to vote, being on the Electoral Roll helps lenders confirm your details and address, which will improve your credit score. 

Why Checkmyfile is different 

Most credit score services only show you data from one or two credit reference agencies. But each agency holds different information about you – and that means your score can vary depending on where you look. 

Checkmyfile is the UK’s most detailed credit report. We show you data from all three agencies in one easy-to-read report, so you can see the full picture and take back control of your credit health. Sign up today. 

Final thoughts 

Universal Credit doesn’t directly affect your credit score, and it won’t appear on your credit report. But things like missed payments or increased reliance on credit can have an impact. 

No matter where your score sits right now, there are always steps you can take and habits you can build to improve your credit health over time. By staying informed, checking your report regularly, and managing your credit health, you can keep your score in shape. 

At Checkmyfile, we believe that everyone deserves a fair shot, no matter their background or financial situation. Being on Universal Credit doesn’t define you – and it certainly doesn’t mean you can’t have a strong credit profile. 

And remember, your Checkmyfile credit report gives you absolute clarity on where you stand, and we’re on hand to guide you on your journey to better credit health. Get started.