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Factors That Affect Your Credit Score in 2022

Credit scores are boring. We don’t try to dress them up any other way. Nobody’s idea of fun is checking their credit score. In fact, checking your credit score when you have credit issues can be depressing. We only tend to pay attention to what’s listed there when we intend to apply for credit – perhaps for a loan, a credit card, or even a new car or a mortgage. However, leaving it until the moment before applying for credit is a bad idea. If there’s something wrong with your score, you won’t have enough time to correct or improve it. A bad credit score can and will prevent you from getting credit. Perhaps you’ve even experienced that yourself in the past.

All lenders – apart from loan sharks, who you should never use – will assess your digital credit score before they decide to lend you money or not. For them, it’s about risk versus reward. Lending you money is a risk, but the reward is the interest they make on the line of credit they provide to you. It’s almost like a gambler at an online casino working out the odds before placing a bet. A casino player wants to make sure they have a fair chance of making a profit before spending money, and so does a lender. That’s why the smarter online casino players will use a service like sistersite.co.uk to check that a casino sister site network is reputable before they spend any money there. Your credit report is to lenders what Sister Site is to casino players and is used for the same reasons.

You might think you’ve read articles like this before, but the factors that affect a credit report don’t stay the same. What’s preventing you from getting credit now is likely to be different from what prevented you from getting credit five years ago. We all need a refresher every now and again, so here are the factors that are likely to determine whether or not you’re eligible for credit in 2022.

Are you on the electoral register?

We associate the electoral register with voting, and rightly so. If you’re not on the electoral register, you can’t vote in local or general elections. Most people ensure that they’re on the electoral register wherever they live for that reason, but some people aren’t interested in politics. For that reason, they don’t bother to ensure that they’re on the electoral register, or they don’t update their information. This is a mistake because, as the UK government’s website confirms, credit reference agencies use the electoral register to identify applicants. If they can’t verify your identity on the electoral register, they’re less likely to offer you credit. The good news here is that you can visit the government’s website and either register or update your information in a matter of minutes, so if you’re not on the register right now, you can quickly fix the issue.

Are you still connected to an ex-partner?

You don’t have to have taken out a joint loan or credit card with a former partner to be linked to them financially. Sharing an address for long enough is sometimes enough to create a link, as is having a shared bank account even if the account doesn’t have an overdraft facility. If a connection exists, and the person you’re linked to has a poor credit score, your credit score could also be dragged down even if you no longer have anything to do with that person and your personal credit rating is excellent. Again, though, this is a relatively easy problem to fix. You should be able to request that any links with former partners are removed by logging into a credit reference agency’s website and following prompts. You may need to provide proof of address and a copy of a current bank statement to demonstrate that you’re no longer living together or sharing accounts.

Is the information on your credit report correct?

Credit agencies aren’t perfect. They can and do make mistakes. If you’re being turned down for credit but don’t believe that you should be, check every detail on your credit report carefully. Can you identify every card and account on there? Is your address and date of birth information correct on each account? If you have old missed payments or defaults on there, have they been removed after six years like they should be? Don’t just assume that your report must be correct, and so the problem must lay with you – the information on your report is only as good as the information provided to credit reference agencies by your existing lenders, and lenders sometimes get things wrong.

Are you using credit for the sake of it?

This is the single most important piece of advice that’s changed recently in relation to credit reports. It’s a commonly-held belief that you can improve a poor credit score by taking out a credit card and then making repayments on it every month. Some large banks still promote this as a good idea. There are circumstances where it can be a good idea, but in most cases, it isn’t. Making regular repayments on a credit card demonstrates that you can be trusted to make repayments on time, but the balance on that card counts against your overall credit limit. The more credit you have outstanding, the less credit you’re likely to be offered. Taking out a credit card to improve your credit score only makes sense if you’re able to repay the balance in full every month. If you’re not able to do that, the strategy is counter-productive. Paying off only the minimum balance tells potential lenders that you’re struggling to stay on top of your existing credit commitments and don’t have the budget to take on any more.

Defaults and county court judgements will do enormous harm to your credit rating and remain visible for several years after they’re registered, but we suspect that you knew that already. The information we’ve listed above is less well-known, so we hope it proves to be useful to you. Whatever it is you’re searching for credit for, good luck with your hunt!

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