{"id":26492,"date":"2022-03-31T06:25:46","date_gmt":"2022-03-31T05:25:46","guid":{"rendered":"https:\/\/www.lendingstream.co.uk\/blog\/?p=26492"},"modified":"2023-06-27T11:11:06","modified_gmt":"2023-06-27T11:11:06","slug":"what-affects-your-credit-score","status":"publish","type":"post","link":"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/","title":{"rendered":"What Affects Your Credit Score?"},"content":{"rendered":"\n<p>Your credit score (also known as credit rating) shows your creditworthiness. The higher the score, the better you as a borrower will look to potential lenders.<\/p>\n\n\n\n<p>Your credit score is partly based on how you\u2019ve managed your money in the past. Your credit history may include your total level of debt, repayment history, number of open accounts as well as other factors like if you\u2019re on the electoral roll. Lenders use credit scores as part of the application process to determine how suitable you would be for a loan.<\/p>\n\n\n\n<p>So, what can affect your credit score? Read on to find out.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f2823a8bf4c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f2823a8bf4c\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#8_factors_affecting_your_credit_score\" >8 Factors Affecting Your Credit Score:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#1_your_credit_history_over_a_number_of_years\" >1. Your Credit History Over A Number of Years<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#2_payment_history\" >2. Payment History<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#3_hard_credit_searches\" >3. Hard Credit Searches<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#4_low_debt_to_income_ratio\" >4. Low Debt To Income Ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#5_creating_and_sticking_to_a_budget\" >5. Creating and Sticking To A Budget<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#6_your_credit_utilisation\" >6. Your Credit Utilisation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#7_mistakes_in_your_credit_report\" >7. Mistakes In Your Credit Report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#8_ccjs_bankruptcy\" >8. CCJs &amp; Bankruptcy<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#whats_the_best_way_to_improve_your_credit_score\" >What&#8217;s The Best Way To Improve Your Credit Score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-affects-your-credit-score\/#conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"8-factors-affecting-your-credit-score\"><span class=\"ez-toc-section\" id=\"8_factors_affecting_your_credit_score\"><\/span><strong>8 Factors Affecting Your Credit Score:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-your-credit-history-over-a-number-of-years\"><span class=\"ez-toc-section\" id=\"1_your_credit_history_over_a_number_of_years\"><\/span><strong>1. Your Credit History Over A Number of Years<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While the amount of years you\u2019ve had your accounts for aren\u2019t the most important factors for determining your credit score, they can have an impact. Having a credit history over a long period of time shows lenders you\u2019ve managed to sustain your loans and credit commitments reliably over time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-payment-history\"><span class=\"ez-toc-section\" id=\"2_payment_history\"><\/span><strong>2. Payment History<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Any late payments are considered when calculating your credit score. Overdue payments could suggest you\u2019re <a href=\"https:\/\/www.lendingstream.co.uk\/money-worries\/financial-problems\/\" target=\"_blank\" rel=\"noopener\"><strong>struggling to manage your finances<\/strong><\/a>, which may have a negative knock-on effect when you next apply for credit.<\/p>\n\n\n\n<p>If a late payment is recorded on your credit file, it will stay there for 6 years.\u00a0If this happens, make sure you keep up with future payments. Over time you will see your credit score improve, making it easier to get approved for credit at better rates.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-hard-credit-searches\"><span class=\"ez-toc-section\" id=\"3_hard_credit_searches\"><\/span><strong>3. Hard Credit Searches<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A credit search is when a lender checks your credit report as part of an application for loans or other forms of credit. The search can view late payments, bankruptcy, any CCJs (<a href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-is-a-ccj\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.lendingstream.co.uk\/blog\/what-is-a-ccj\/\" rel=\"noreferrer noopener\"><strong>County Court Judgement<\/strong><\/a>) and other information.<\/p>\n\n\n\n<p>A <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/hard-credit-check\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.lendingstream.co.uk\/blog\/hard-credit-check\/\" rel=\"noreferrer noopener\"><strong>hard search<\/strong><\/a> often has a temporary impact on your credit report so it\u2019s important to try and not apply for credit with several lenders at the same time as this will impact your score negatively. Whereas a <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/soft-credit-check\/\" target=\"_blank\" rel=\"noopener\"><strong>soft search<\/strong><\/a> will not be visible to lenders, just the customers and won\u2019t impact your score negatively.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"4-low-debt-to-income-ratio\"><span class=\"ez-toc-section\" id=\"4_low_debt_to_income_ratio\"><\/span><strong>4. Low Debt To Income Ratio<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Your debt-to-income ratio is the amount of money you owe in relation to your monthly income.<\/p>\n\n\n\n<p>For example, if your monthly salary is \u00a32,000 and your minimum loan payment is \u00a3600 per month, it means that roughly 30% of what you earn per month goes towards paying off your debt. This is considered low. The higher your debt-to-income ratio is, the harder it may be for lenders to approve your application.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"5-creating-and-sticking-to-a-budget\"><span class=\"ez-toc-section\" id=\"5_creating_and_sticking_to_a_budget\"><\/span><strong>5. Creating and Sticking To A Budget<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>While budgeting doesn\u2019t necessarily directly impact your credit score, it\u2019s always a good idea to make and stick to a budget. <strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/best-budgeting-tips\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.lendingstream.co.uk\/blog\/best-budgeting-tips\/\" rel=\"noreferrer noopener\">Budgeting<\/a><\/strong> gives you a clear overview of your income and expenses. This in turn will help you understand if you can afford the monthly payments of any <a href=\"https:\/\/www.lendingstream.co.uk\/loans\/\" target=\"_blank\" rel=\"noopener\"><strong>loans you take out<\/strong><\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"6-your-credit-utilisation\"><span class=\"ez-toc-section\" id=\"6_your_credit_utilisation\"><\/span><strong>6. Your Credit Utilisation <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If possible, you should try to keep your credit utilisation below 30%. Using too much of your available credit can negatively affect your score. For example, if the limit on your account is \u00a31000, it would be ideal to avoid spending more than \u00a3300 at any one time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"7-mistakes-in-your-credit-report\"><span class=\"ez-toc-section\" id=\"7_mistakes_in_your_credit_report\"><\/span><strong>7. Mistakes In Your Credit Report<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Even if you have a good credit score, there can be errors in your credit report.<\/p>\n\n\n\n<p>It\u2019s a good idea to check your credit report every few months as there could be errors in there that harm your score. Make sure all your information such as accounts and repayments data are accurate and up to date.<\/p>\n\n\n\n<p>If you notice any inaccuracies or think you might be a victim of identity theft, contact your lender.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"8-ccjs-bankruptcy\"><span class=\"ez-toc-section\" id=\"8_ccjs_bankruptcy\"><\/span><strong>8. CCJs &amp; Bankruptcy<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There are many other factors that could affect your credit score for example having a CCJ (County Court Judgment) or having declared bankruptcy.<\/p>\n\n\n\n<p>The more recent the CCJ, the greater the impact on your credit score.<\/p>\n\n\n\n<p>If you are struggling to pay your debts, it may be better to negotiate with the creditors rather than ignoring them or <strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.lendingstream.co.uk\/blog\/what-happens-when-you-declare-bankruptcy\/\" rel=\"noreferrer noopener\">declaring bankruptcy<\/a><\/strong>.<\/p>\n\n\n\n<p>Bankruptcy can have a negative impact on all aspects of your financial life, including credit reports and future borrowing ability. Bankruptcy stays on record for six years but depending where you live, it may appear on your credit report for longer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-s-the-best-way-to-improve-your-credit-score\"><span class=\"ez-toc-section\" id=\"whats_the_best_way_to_improve_your_credit_score\"><\/span><strong>What&#8217;s The Best Way To Improve Your Credit Score?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The best way to <strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/improve-your-credit-score\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/www.lendingstream.co.uk\/blog\/improve-your-credit-score\/\" rel=\"noreferrer noopener\">improve your credit score<\/a><\/strong> is by keeping track of your credit cards and loans, only using what you can afford and making your repayments on time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"conclusion\"><span class=\"ez-toc-section\" id=\"conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Your credit score is an important part of your financial health. A good credit score could lead to several benefits, including access to loans and credits at attractive interest rates.<\/p>\n\n\n\n<p>We hope this article has helped you understand <strong>what can affect your credit score<\/strong>.<\/p>\n\n\n\n<p><strong>Disclaimer:<\/strong> Please note, we are not providing financial advice. Our blogs are written for informational purposes only.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Your credit score (also known as credit rating) shows your creditworthiness. The higher the score, the better you as a borrower will look to potential lenders. Your credit score is partly based on how you\u2019ve managed your money in the past. Your credit history may include your total level of debt, repayment history, number of [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":26519,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[267],"tags":[],"class_list":["post-26492","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans"],"_links":{"self":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26492"}],"collection":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=26492"}],"version-history":[{"count":5,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26492\/revisions"}],"predecessor-version":[{"id":27397,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/26492\/revisions\/27397"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media\/26519"}],"wp:attachment":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=26492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=26492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=26492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}