Your credit score is a dynamic number that changes over time to reflect your financial behaviour. It is calculated by credit reference agencies using the information in your credit report.
Understanding what influences your score helps you manage it more effectively. Here are the key factors that can impact your credit score - both positively and negatively.
1. Your payment history (the biggest impact)
This is the single most important factor. It shows lenders how reliably you manage your financial commitments.
What helps: Paying all your bills on time every month, including loans, credit cards, mortgages, and regular commitments like phone or utility contracts. If you have missed a payment in the past, a run of 16 months of on-time payments will usually help your score start to recover.
What hurts: Late or missed payments, defaults, or accounts sent to collections. These remain on your credit file for up to six years and can significantly reduce your score.
2. Credit utilisation (how much of your available credit you use)
This measures how much you owe compared to your total credit limit.
What helps: Using a small percentage (ideally under 25%) of your available credit. Keeping existing credit accounts open, even if you are not using them, can help here as it keeps your total available credit limit higher, automatically lowering your utilisation percentage.
What hurts: Using a very high percentage of your credit limit (often called "maxing out" your cards). This can be a sign of financial stress and can lower your score.
3. Your credit history (length and age)
This refers to how long you have been using credit responsibly.
What helps: Having a long history of well-managed accounts. Lenders like to see a track record of consistent, reliable borrowing over several years. Keeping an old, well-managed account open can be beneficial.
What hurts: Having a very short credit history (a "thin file") or no credit history at all. This makes it difficult for lenders to assess risk.
4. Public records and personal information
Data from public sources also influences your credit score.
What helps: Being registered to vote on the electoral roll at your current address. This is a crucial identity check. Once registered, you will typically notice improvements in your score after being at the same address for around 18 months.
What hurts: Having adverse public records like a County Court Judgment (CCJ), an Individual Voluntary Arrangement (IVA), or bankruptcy. These can seriously damage your score and remain visible for six years.
5. New credit applications (hard searches)
This looks at how frequently you are applying for new credit.
What helps: Applying for new credit infrequently. A good rule of thumb is to aim for no more than 1 or 2 applications within a 6-month period.
What hurts: Making many formal credit applications in a short space of time. This leaves multiple "hard searches" on your report, can temporarily lower your score and signal potential financial pressure.
6. Financial associations (people you are linked to)
Your score can be influenced by people you are financially connected to, such as a partner you share a joint mortgage or bank account with.
What helps Regularly checking your report to ensure your financial associates are accurate. If you are no longer linked to someone (for example, you have closed a joint account with an ex-partner), you should raise a dispute to 'disassociate' from them so their financial behaviour does not affect you. Note that simply living with someone does not create a financial link.
What hurts: Being financially linked to someone with a poor credit history. Even if your own history is perfect, lenders may view you as higher risk if a financial associate has negative markers like missed payments or defaults.
What has little or no direct impact? It's also useful to know what does not directly affect your score, including checking your own score (this is a soft search), your salary, the balance of your savings account, or getting an insurance quote.
By focusing on the positive actions in each of these areas, you can build and maintain a healthy credit score. For practical steps, see our FAQ: "Are there ways to improve my credit score?"
What has little or no direct impact?
It's also useful to know what does not directly affect your score, including checking your own score (this is a soft search), your salary, the balance of your savings account, or getting an insurance quote.
By focusing on the positive actions in each of these areas, you can build and maintain a healthy credit score. For practical steps , see our FAQ: "Are there ways to improve my credit score?"