Your credit score, your credit report and your credit history are what lenders use to decide if they will let you borrow money. Your credit history is information about how you have managed your money and repayments in the past, and it makes up part of your credit report.
Here is a list of things that can affect your credit score and your credit history, positively and negatively.
Bank account
If you have access to a bank account in your name, it shows the credit reference agencies and lenders that you can manage your money. If you don’t have a bank account in your name, the credit reference agencies and lenders can’t see if you have money coming in and they can’t see if you’re able to pay back money you borrow.
Direct Debits
When you have direct debits set up (automatic payments for bills), it shows the credit reference agencies that you’re able to manage your money and pay your bills. If you don’t have direct debits set up, it might look like you aren’t paying any bills, that you can’t repay money you have borrowed, or that you don’t use your bank’s features to manage your money.
Missing Payments
If you miss repayments on money you have borrowed, or if you miss a payment on a bill, you are more likely to see your credit score go down because the credit reference agencies and lenders see you as a risk – that they may not get back the money you borrowed from them. If you make repayments and pay bills on time, it shows the credit reference agencies and lenders that you are reliable and able to manage your money. Your credit score will go up.
Electoral Register
Credit reference agencies and lenders will use the electoral register to check that you live where you say you do when you apply for credit.
- If your current address and where you are registered on the electoral register are different, your credit score will go down.
- If you move to a new house, make sure you contact your local Electoral Registration Office to update your address on the electoral register, so your credit score doesn’t go down.
- If you have no fixed address, you won’t be on the electoral register so you’ll need to make sure the other information about you in your credit report is correct so that your credit score is as high as it can be.
Financial Links
When you get credit with someone else (such as a partner, sibling or parent) for a credit card, loan or mortgage, your credit histories are linked together. If that person does something to make their credit score go down, yours might go down too.
Wrong credit history
If the information in your credit report or history is wrong, or information is missing, and making your credit score lower than it should be, you can ask the credit reference agencies to check – this is called a ‘dispute.’ You can also do this if information has been on your credit history for too long.
Dispute your credit history with Experian, Equifax or TransUnion.
After raising a dispute, if the information on your credit report can’t be changed, you can ask the credit reference agency to add a ‘notice of correction.’ This is a short statement you write which will be attached to your credit report for any lenders to see when you apply for credit.