Got a low credit score? This might be why.

By Natasha Culzac

Silly mistakes, whether you’re conscious of them or not, can cost your credit score prized points - don't let it happen.

Check out these top tips to ensure you don't find yourself losing important points on your score. 

Missing a bill payment

Maybe you “forgot” it, or maybe you really did just forget, but now the company’s harassing you for the money. Either way, late bill payments are bad news for your score. Set up direct debits so that you’re forced to cover them.

Frantically applying for lots of credit in a short space of time

Furiously applying for credit all over the place, especially if done within days or weeks of each other, can really scream financial desperation to lenders. It might be that you want to choose from the best offers, but each time you formally apply for credit, a hard check is done on you and this is recorded for a year. It does make shopping around harder, but there are ways around this. Check your eligibility for credit cards using MoneySupermarket’s tool, or do the same through a credit reference agency - ClearScore shows you cards you’re most suited for based on your information and neither of these features will affect your score because they don’t use hard credit checks.

Going over credit limit/agreed overdraft

If you’ve smashed through your credit card or overdraft limit, not only will you face expensive charges but a note will be made on your credit report. This means that other lenders will see you as having poor credit management. Get back into your agreed limit as soon as possible and – this is obviously easier said than done – try to start paying a lot of it back so you’re using less than a third.

Using credit cards at ATMs too often

Using your credit card to withdraw at a cash machine is actually recorded on your credit report. On their own, one or two cash withdrawals shouldn’t spell the end of times, but if you’re regularly doing it a lender will think you’re under massive financial stress and score you accordingly. It’s also hugely expensive to use your credit card at an ATM.

Becoming financially associated with someone who has poor credit

Sadly, a partner’s dodgy credit history will affect yours if you’ve got a joint account such as an overdraft or mortgage. Sometimes this can mistakenly happen with housemates, too. Find out if you are financially associated with someone by checking your credit report. You can only become disassociated with that person if the joint account in question is settled and closed. If it states that you are linked with someone you no longer share anything with, you can issue a ‘notice of disassociation’ and cut ties with that person. Hey presto!

Not dealing with errors/fraudulent things on your credit report

If credit has been taken out in your name without you knowing, it’ll have a huge effect on your score and creditworthiness. Fraudulent agreements, however rare, need to be dealt with promptly. Separately, even having the wrong address for you, because an old but still-active bill has you registered as living elsewhere, could impede ID checks. Your report needs to be seamless. Errors and unfair defaults on your credit report can harm your chances of being approved credit. Here's a article on how to fix them.

Using too much of your available credit

‘Utilisation’ is the percentage of your available credit that you’re using up. So, on a card with a £1,000 credit limit, if you’ve spent £750 then your utilisation rate is 75%. A high utilisation rate puts lenders off because it makes them think that you’re under financial stress. An optimum rate would be 0-30%. Get your balance down and your score will adjust with it.

Leaving credit and store cards lying around unused

It’s actually better to close some unused cards because having them lying around poses a bit of a fraud risk. Don’t close down the card with the highest credit limit – that tells other lenders that you have been viewed as creditworthy before. But if you have four cards, get rid of at least two.


Paying the minimum on a card

Although paying the minimum amount on a card still counts as a payment, it really doesn’t help you. Because of the interest, it takes forever to clear the debt and is not an advisable way of paying off a card. In addition, if you’ve regularly been paying the minimum, to some lenders this suggests that you are struggling. Up your payments as much as you can.

Moving house too often

Stability is just one thing that lenders look for. Moving loads in your 20s or 30s isn’t really a surprise to most establishments now, but they do prefer it if you’ve been in one address for a few years. Make sure you are registered to vote at each address you move to – that will help your score, no matter how many times you move.

Don’t be disheartened! Though there are lots of ways a decent credit score can be hampered, just taking a few steps to ensure that information on your report is all correct and up-to-date can make a world of difference. Reducing your debt and making sure that you keep up with payments on time will then help lift your score dramatically.

Thin credit file

In some ways a thin credit file is just as bad as having poor credit history. Due to the little evidence of your relationship with money. It’s likely a thin credit file will make it difficult for you to open bank accounts, get a credit card, apply for a mortgage - or even just take out a mobile phone contract. Want to know if you're a victim of having a thin credit file? Here's a breakdown for you.



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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