5 factors that could be holding your credit back

If your credit score isn’t as high as you’d like, you might be wondering why. What happened in your financial history to prevent your score from reaching the top?

If you’re asking this question and looking to improve your credit score, read our rundown of five common things that can prevent people from having an excellent credit profile.

1. You’ve never taken out credit before

Your credit score reflects your ability to make repayments after taking out credit. It’s based on your history of paying back credit cards, loans and other forms of credit. So if you’ve never had a credit card or otherwise borrowed, you won’t have much credit history to speak of.

Our Card Matcher tool helps you compare credit card options. What’s more, it only leaves a soft search on your credit report, so using Card Matcher won’t affect your credit score.

2. You’ve applied for a lot of credit in a short amount of time

Every time you apply for a loan or credit card, it shows on your credit report. And when you submit many applications in a short period of time, it may indicate to lenders that there are issues with your financial situation.

Staggering credit applications over a long period of time may help minimize the impact on your credit score. And whenever possible, consider whether you might be accepted before applying.

3. You haven’t repaid past debt on time

If you have accounts in arrears, a history of making late payments or a court judgement for unpaid bills, your credit score can tell the tale. These things indicate that you may not be in a good position to take on and pay back any more credit.

To get yourself into a better financial position, work out a plan for paying off your debts. Organisations like StepChange or Citizens Advice can help you build one — and their services are free.

And while it can take some time paying down your debts for any improvements to show in your credit score and on your credit report, taking control of your situation can help your chances of being approved for credit in the future.

4. You’re not on the electoral register

While voting is up to you, it’s important for your credit that you’re on the electoral register and that your information is accurately listed. This lets lenders verify your identity. And it helps indicate a stable living situation, particularly if you’ve been at the same address for a year or more.

You can register to vote at either About my vote or Gov.uk.

5. Your credit reports contain mistakes

If your credit score is lower than expected, it’s important that you look through your credit report to understand what’s on it. You might find incorrect information listed, or that other data that doesn’t apply to you is dragging your score down. Credit report mistakes can be a result of basic error, but they can also be a sign of identity fraud. Investigate anything that looks suspicious to find out if someone has applied for credit in your name. If you find what you believe to be an error, contact your credit reference agency.