What affects your credit score?

7 min read

Updated: May 28, 2026

Written by

Emily Tye

Reviewed by

Amy Lancashire

Several factors affect your credit score, but the most significant are your payment history, how much of your available credit you're using, and how many recent credit applications you've made. Your score is calculated by three credit reference agencies (CRAs): Experian, Equifax and TransUnion, each using their own formula and scale, but all looking at the same core information on your credit file.

Understanding what these factors are, and how much weight each carries, puts you in a better position to make decisions that protect or improve your score over time.

Payment history

Your track record of paying bills on time is one of the biggest factors in your credit score. Lenders report your payment behaviour to the CRAs, and any missed or late payments are recorded on your credit file.

This applies to credit cards, personal loans, mortgages and mobile phone contracts. Some energy and water providers also report your payment history to CRAs, though not all do (it varies by provider). Council tax and TV or streaming subscriptions do not typically appear on a standard credit file.

Missed payments stay on your credit report for up to six years from the date they were recorded, even if you have since paid the debt in full. Setting up direct debits for at least the minimum payment reduces the risk of accidental missed payments.

Credit utilisation

Credit utilisation is the percentage of your available credit that you're currently using. For example, if you have a total credit limit of £2,000 across your credit cards and you're carrying a £1,600 balance, your utilisation is 80%.

High utilisation can suggest to lenders that you're financially stretched. As a general rule, aim to keep your utilisation below 25%. For example, if you have a £1,000 credit limit, try not to carry a balance above £250. The consistent guidance across all CRAs is: the lower, the better.

Credit applications and hard searches

Every time you apply for credit (a credit card, loan, mortgage or phone contract), the lender runs a hard search on your credit file. Hard searches are visible to other lenders and stay on your file for up to two years, depending on the credit reference agency: Experian and Equifax remove them after 12 months, while TransUnion retains them for two years.

Making several credit applications in a short period can lower your score, as it may signal to lenders that you're actively seeking credit you can't otherwise access. This is true even if each individual application is for a small amount.

Using a soft search tool (such as a credit card eligibility checker or loan eligibility checker) before formally applying is a straightforward way to reduce unnecessary hard searches. These do not affect your score and are not visible to lenders.

You can read more about how applying for a credit card can affect your credit score in our dedicated guide.

Length of credit history

Lenders use the age of your accounts as one signal of financial stability. A long history of managing credit well is viewed more favourably than a short one.

Two things can shorten your average account age: opening lots of new accounts in a short period, and closing old ones you no longer use. Before closing an old credit card, it’s worth considering whether it is helping your average account age, particularly if it has no annual fee.

Read more in our guide to how to cancel a credit card.

Electoral roll registration

Being registered to vote at your current address is one of the simplest steps you can take to support your credit score. Lenders use the electoral roll to verify your identity and confirm where you live.

If you have recently moved and have not yet updated your registration, this can have a small negative effect. You can register to vote on gov.uk – it takes a few minutes and the effect on your score can be noticeable relatively quickly.

Public records – CCJs, defaults, bankruptcy and IVAs

Serious financial events leave a significant mark on your credit file and are the most damaging entries a lender can see.

Defaults: Recorded when a lender closes your account due to non-payments. Defaults stay on your file for six years from the date of default, regardless of whether you later repay the debt. Read more about how long defaults stay on your credit file and what happens after that period ends.
County Court Judgments (CCJs): A court order confirming you owe a debt. What a CCJ is and how it affects your credit is covered in our full guide. A CCJ stays on your file for six years, though if you pay the full amount within one month of receiving it, it can be removed entirely.
Bankruptcy and IVAs: An IVA stays on your credit file for six years from the date it was approved, so for a typical five-year arrangement, the record may drop off shortly after it completes. Bankruptcy similarly stays on your file for six years from the date of the order. What an IVA is is covered in our dedicated guide.

Credit mix

Having a mix of different credit types, such as a credit card and a personal loan, can have a small positive effect on your score. It suggests you are capable of managing different kinds of borrowing responsibly.

That said, credit mix is a minor factor compared to payment history and utilisation. It is not a good reason to take on credit you do not need. Managing what you already have well matters far more.

Financial associations

If you hold a joint account, joint mortgage or certain joint financial products with another person, you become financially linked to them on your credit file. This is called a financial association.

Your credit score can be affected by the credit behaviour of anyone you are financially linked to, even if the joint account is rarely used. If you separate from a partner or no longer share finances with someone, you can ask the CRAs to remove the financial association once the joint product is closed. This process is called a notice of disassociation, and each CRA has its own process for requesting one.

What doesn't affect my credit score?

Several things are commonly assumed to affect your credit score but do not appear on your credit file at all:

Your income and savings. Lenders may ask about these separately when assessing an application, but they are not part of your credit report.
Your employment status. Not recorded by CRAs.
Checking your own score. Viewing your own credit report or score is a soft search and has no effect.
Previous residents at your address. Their credit history does not carry over to you. Your file is tied to you as an individual, not to a property.
Council tax and TV or streaming subscriptions. These do not typically appear on a standard credit file.

FAQs

Does Klarna affect my credit score?

Yes, using Klarna can impact your credit score. This can be in both a positive way (if you make all payments on time) or a negative way (if you miss payments). Read our full guide to how Klarna can affect your score.

Does Clearpay affect my credit score?

Clearpay states that it does not currently report account activity or repayment history to UK credit reference agencies, so using it responsibly will not build your score. Clearpay also uses a soft credit check which doesn’t impact your score. However, it’s worth checking the latest terms directly with Clearpay (and any other Buy Now, Pay Later service).

Does having an overdraft affect my credit score?

An arranged overdraft that you stay within is unlikely to cause significant harm to your credit score. If you use it regularly and clear it each month, lenders can see that as a sign of responsible borrowing.

However, consistently using most or all of your overdraft limit can signal to lenders that you're financially stretched (similar to carrying a high balance on a credit card). Going into an unarranged overdraft is treated more seriously and is more likely to have a negative impact.

Exceeding your arranged limit or failing to cover charges on the account will be reported and can affect your score.

Does a balance transfer affect my credit score?

Applying for a new credit card for a balance transfer typically results in a temporary credit score dip. However, by successfully managing your consolidated debt and paying it off promptly, you can potentially improve your credit score in the long run. Read more about how a balance transfer can affect your credit score.

Does a mortgage in principle affect my credit score?

It depends on whether the lender runs a hard or soft search at that stage. Many lenders use a soft search for a mortgage in principle, which has no effect on your score. Confirm with your lender before proceeding if you are unsure.

Does gambling affect my credit score?

Gambling activity itself does not show up on your credit report or impact your credit history. However, it can have an indirect effect.

For example, if you were to take out payday loans or cash advances to spend on recreational gambling, this could have a negative impact on your financial health and, should you miss repayments, your credit score.

Does universal credit affect my credit score?

Claiming Universal Credit won’t impact your credit score. Your credit score reflects your borrowing history, debts and repayment record. As Universal Credit is considered part of your income, it won’t appear on your credit report and therefore won’t affect your score.

Do student loans affect my credit score?

Unlike other loans and financial products for borrowing money, student loans do not appear on your credit report and, as a result, your credit score is not affected by them.

Does switching banks affect my credit score?

Switching banks can have a small, temporary effect on your credit score. When you apply for a new account, the bank may run a hard credit check. A hard search will appear on your credit file and may cause a minor, short-term dip.

The act of switching itself is unlikely to cause lasting damage. However, avoid closing your oldest current account if you can help it. The age of your accounts is one factor CRAs consider, and while a closed account's history remains on your file for up to six years, reducing your average account age can have a small negative effect.

There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.

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