What does a bad credit score mean for my future and what can I do about it?

By Natasha Culzac

Paying for for last year's financial mistakes today is annoying. However a bad score isn't forever and can be rectified.

If you’re up Credit Score Creek without a paddle, first thing’s first – don’t panic. It can be sorted. A bad credit report and score does affect your future, but only in the near one, thankfully. Unfavourable items on your credit report follow you around for six years. After that, they’re wiped clean.

How does my score affect my future, really?

A bad score will hinder your chances of not only getting credit, but being offered a good interest rate. Only those with the highest creditworthiness get the sexy headline rates shown on TV ads.

You might not want a new car on finance now, but in the next few years if you decide you do, or you suddenly think it’s time for a mortgage or a credit card, your credit report and your score is what helps you get it. You need to make sure that this financial CV of yours is tip-top and that you look attractive as possible to a potential creditor.

But bad stuff only stays on your report for six years?

Yes, but six years is a long time when you think of all the bills you failed to pay as a poor 23-year-old graduate. These can still affect you when you’re 28 and eyeing up a loan or credit card.

It’s annoying that decisions, or even mistakes, made five years ago can still financially harm you today, or that those made today will harm you in five years’ time, especially if you’ve got ‘Buy a House’ firmly cemented in your ambitious five-year-plan.

Creditors generally look at the most recent parts of your report – what you’ve been upto over the last year – but they do sometimes factor in things from five or six years ago.

If you haven’t already checked your score, go check it now, go on! There are a range of paid for reports that you can access or subscribe to, as well as a number of new platforms that are totally free. These will each give you their own guidance score and you’ll be able to see any black marks against your name. Note that the score is just a guide, this isn’t a score that lenders see.
It’s actually worth staying subscribed for a bit, too, so that you can monitor your report on a month-by-month basis as companies update the info on you. It also becomes really addictive. You think your credit score couldn’t sink lower than a D-lister on ‘Celebrity Love Island’ and then a month later it does.

What can I do about it today?

Ultimately just be aware that things you do today can have an impact on your chances of getting credit years down the line.

Like what?

Missing payments, defaulting, applying for loads of credit in a short space of time, or even not challenging wrong items on your report – it’s rare but an administrative error could result in you having a mark against your name for something that you didn’t do. You can also make a ‘notice of correction’, which is a maximum 200-word statement from you about why, for example, you missed a payment (loss of job etc).

It’s worth noting that while a payday loan doesn’t hugely affect your score per se, the fact that you got one is recorded and it can really turn some lenders off if they see it on your report. If you are considering a payday loans here are 10 things you should know.

Top takeaway

Don’t let your score drag you down. It’s easy to forget that today’s mistakes could affect the options you’re given in months’ or years’ time. There are a number of things you can do now to improve it - see our ‘Things you must do to improve your credit score’ article for a practical list.


By Natasha Culzac 

Thanks to a journalistic career history and a childhood at Sylvia Young Theatre School, Natasha has her fingers in a few professional pies, doing her best impression of a model and actor as well as personal finance writer. Outside of work she compulsively watches BBC period dramas and constantly lies to herself that this year will be the year she learns French, once and for all.

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