3 Surprising Factors That May Lower Your Credit Score (2024)

We hope the fact that you are reading this article indicates you already know something about what a credit score is. But in case you need a refresher: it’s a rating, or score, that can be calculated by a credit reference agency or even a lender, and which constitutes an assessment of the risk involved in lending money to the “scored” individual. For a more detailed understanding of credit scores and how they're calculated, visit MoneyHelper.

You won’t have just one credit score, then. But whatever credit score of yours a lender may look at when deciding whether to approve your loan application, you will want it to be a good score.

Some of the things that can adversely affect a person’s credit score are relatively well-known and obvious, such as the given individual failing to keep up with their repayments on an existing loan.

Not everything that could be detrimental to someone’s credit score, though, actually comes under the banner of “obvious”. You might not have realised, for instance, that the below three things can all play a part in driving credit scores down.

Failing to Take Library Books Back

Most of us are probably aware that we can be hit with a fine if we fail to bring borrowed books back to the library at the stipulated time. The potential danger comes, though, when you then ignore that fine – a situation that could eventually lead to a debt collector being instructed to recover both the books and the penalty fee. That’s a situation that could negatively impact your credit score. Learn more about how library fines can impact your credit score at Citizens Advice.

Being Late with Payments on a Mobile Phone Contract

This is one that could easily catch out a lot of people. After all, failing to pay a mobile phone bill on time may not seem anything like as critical as, for example, failing to pay the rent on time. It is crucial to appreciate, though, that if you want to keep your credit score looking good, you really shouldn’t be late with any of your bill payments. Not keeping up with the payments on your mobile phone’s account is regarded as a serious negative, so if it happens, you will certainly feel the big hit on your credit rating. Find out more about this at Experian.

Hardly Ever Using Credit

This might seem to be a rather odd one, but of course, pointing these out is the point of this article! The reason why hardly using credit can be a bad thing for a credit score, is that lenders like to see a recent track record of you using credit in a sensible way, including keeping within credit limits and making your repayments by the required dates. If, then, you don’t have an overdraft, never take out loans, and don’t have any credit cards, you could be at risk of having what is known as a “thin credit file”. Or to put it another way, there won’t be recent evidence of how you utilise credit, and therefore, how you would be likely to utilise credit in the future – thereby translating into a low credit score. Understand more about credit utilization at Equifax.

Here at CashCompare, our relationships with leading lenders enable us to make available unsecured loans for bad credit applicants. And of course, paying off such a loan successfully could aid the borrower’s efforts to improve their credit score for the future. Remember, borrowing should always be considered carefully. Late repayment can cause you serious money problems. For help, visit MoneyHelper.

CashCompare is a credit broker and is authorised and regulated by the Financial Conduct Authority. We do not provide loans directly.

Complete and submit our no-obligation quote request form today, and you will be able to discover what could be possible if you are presently considering taking out a short term loan.

This article is for informational purposes only and does not constitute financial advice. Please consult a financial advisor for advice specific to your financial situation.

"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.