What affects your credit score?

Your credit score isn’t a single universal number. Each of the UK’s three main credit reference agencies (CRAs) – Experian, Equifax, and TransUnion – calculate their own score from their own data, and lenders then apply their own internal scoring, affordability tests, and product rules. We have our own scorecard at Checkmyfile too. 

In fact, lenders don't actually see your score. It's more of a personal reference tool to help you understand your overall credit health and see what affects your credit health.

That said, some universal factors will negatively affect all credit scores, and it’s important to understand what they are.

How is your credit score calculated?

Your credit score is primarily determined by scoring models determined by credit reference agencies, and it does vary per agency. Generally, they’re analysing:

• History of paying bills

• Credit and payment history

• Total debt

• Length of credit

• Balances and utilisation

• Missed payments

• Defaults

• New credit applications

• Public records

• Whether you're on the electoral roll

And they take all of that and calculate your score. CRAs all follow a different formula and scoring ranges. 

These ranges are not comparable one-for-one, so focus on your credit health rather than the number you see. Use it as a guide to understand if your score needs work and what’s negatively affecting it. 

What has the biggest impact on your credit score?

There's no single biggest impact on your credit score, but missed payments, defaults, bankruptcies, IVAs, and court judgments are some of the big negatives to be on your credit file. All of them can stay there for 6 years, even though their impact reduces over time.

Credit utilisation and debt levels come next. Being close to card or overdraft limits can lower your score – because lenders can view this as a sign you’re over-reliant on debt, and therefore could struggle to pay them back. 

The length and depth of your credit history is important too. Little or no borrowing history could keep your score low, due to there not being much evidence to show lenders you handle credit well. 

On the flip side, positive big impacts include:

• Being on the Electoral Roll. Up-to-date address details make it easier for lenders to verify you. 

• Making payments on time.

• Monitoring your credit utilisation.

• Maintaining a long history of responsible credit use.

• Limiting new credit applications.

• Reported rent, utility, and mobile contracts.

While there’s no single number for a good credit score, these positive impacts will push you towards lender confidence.

What doesn't affect your credit score?

Not everything you do will affect your credit score. Here are a few things you don’t need to worry about: 

• Checking your own report or score won’t affect it in any way. Credit eligibility checks, known as soft searches, don't impact your score either. 

• Previous occupants at your address don't affect your score. 

• Credit reports don't show your salary (but lenders will look at that for affordability checks) or criminal record.

Your credit score is purely a reflection of the information found on your credit report.

Common mistakes that lower your credit score

It's easy for small mistakes and misunderstandings to lower your credit score.

Some of the most common include:

• Missing commitments such as mobile, BNPL, utility or minimum card payments. 

• Making several full credit applications in a short period. These are recorded on your credit file and lenders can’t see the outcome of an application – so they may view them as a sign you’re reliant on credit and may struggle to take on any further debt.  

• Running cards or overdrafts close to their limits. Again, lenders may see this as a sign you’d find it difficult to pay them back.

• Forgetting to update your address on the Electoral Roll after moving. 

• Checking your report with just one or two credit reference agencies and missing errors or signs of potential fraud recorded elsewhere. 

Keep an eye on everything that’s contributing to your credit score with your most detailed credit report. At Checkmyfile, we put your info from Experian, Equifax, and TransUnion in one place. And if you see something that doesn’t look right, we can help. Get started with a 7-day free trial. It’s then £14.99 a month – cancel online anytime. 

Tips to maintain a healthy credit score

Your credit health is a journey, and positive steps can make a big difference over time. You can keep things in check by:

• Paying every account on time. Consider setting up Direct Debits to make sure you don’t forget a payment. If you’re struggling, speak to the lender before you miss a payment. 

• Monitoring your credit utilisation and only applying for credit when it’s right for your situation.

• Using credit eligibility tools first and avoiding unnecessary credit applications, especially before applying for a mortgage. 

• Monitoring your most detailed credit report.

• If you rent, consider getting your rent payments reported.

If your score’s taken a dip, don’t panic. Following these tips can help you get back on track.