Credit ratings can be complex and at times, extremely frustrating. Even the smallest financial hiccups can leave a lasting footprint on your score. This means that a few missed credit card payments over the years or an outstanding mobile phone debt can compromise your application.

This is why it’s so important to develop a good understanding of your credit rating and the various factors that can affect your score. So, what can affect credit rating? Read on for our guide to factors than can influence your rating, as well as tips on how to boost your score.

Understanding credit ratings

Before we dive in let’s take a look at what credit ratings are and why they matter. Basically, credit ratings are used by prospective lenders to evaluate the overall credit risk of a debtor. Historic financial data is used to predict a borrower’s ability to pay back a debt and calculate the risk of defaulting. A particularly bad credit rating could see some applications rejected. In some cases, it could even rule you out of the lowest rate products.

The latest data from multinational consumer credit reporting agency Equifax reveals just how stubborn credit scores can be. Equifax report that the average Brit is issued with a score of 380. This is considered a ‘fair’ score but is just one point away from the 280-379 category which is considered ‘poor’. The perfect score is 700, suggesting everyday borrowers aren’t necessarily as upstanding as you might think. 

Here’s some of the most common factors that can affect your credit rating:

1. Payment history

Keeping up with your credit card payments is one of best ways to build a good credit score. Even making the minimum monthly payment shows lenders you’re a responsible borrower. It also demonstrates that you can commit to a long-term loan. Missed or late credit payments can tarnish your credit score for up to three years. This is why it’s so important to stay on top of your repayments wherever possible.

2. Hard credit inquiries

Carried out by established financial institutions, hard credit checks dig deep into your credit history. They’re used to help creditors make lending decisions. Hard searches are often carried out when applying for larger loans such as mortgages, credit cards and car loans.

While a hard check or two will only lower your credit score by a few points, frequent checks can damage your score and present you as a higher-risk customer. This is because multiple applications suggest you’re chronically short on cash. It could even indicate that you have an irresponsible attitude towards debt. Hard credit checks can leave a mark on your report for around two years. It’s important to consider if you really need one before authorising a full application.

3. Being registered to vote

Lenders will often turn to the electoral roll as a quick and easy way to verify your name and address. Access to government-certified information is also an effective way for lenders to protect themselves against fraud. Failure to register or update your information can affect your credit score by up to 50 points. This can have a significant impact on finance applications.

4. Mobile phone contracts

While mobile phone contracts may seem like a sundry expense, they can have a big impact on your credit score. Like credit card repayments, staying on top of your phone contract is a good way to strengthen your credit score. This is great way of showing lenders that you can commit to a regular payment schedule.

5. Finances of a partner

If you’re married or in a long-term relationship, the finances of your partner will often be factored into your credit score. In some cases, joining forces can strengthen your application. However, if your partner has a ‘thin’ credit history, it may be best to disassociate yourself from them financially.

6. Borrowing percentages

Credit cards can be a good way to build a strong lending history. However, maxing out your cards can have a negative impact on your application. As a general rule of thumb, it’s best to keep your card borrowing below 25%, unless you plan to pay off the full amount every month. This shows lenders you’re responsible and realistic about the money you borrow, and your ability to pay off debt.

7. Utility bills

More than half of major energy providers are now sharing customer data with credit agencies. This makes is essential to maintain good standing with companies such as British Gas and EDF Energy. Utility bills are another good opportunity to establish a good track record with lenders and boost your credit score.

Factors that won’t affect your credit score

We’ve covered some of the biggest factors that will affect your credit score. Now let’s take a look at some of the things that won’t drag you down.

1. Your salary and disposable income

It’s a common misconception that high salaries translate to better credit scores. In fact, lenders are far more interested in how you manage your debts than how much money you earn. For example, an applicant who earns £35,000 a year and pays off their credit card in full every month is far more appealing than an applicant who earns £100,000 a year and has maxed out their credit card and defaulted on several payments. 

2. Soft credit checks

While hard credit checks can leave a lasting footprint, their soft counterparts won’t affect your credit rating. What’s more, they can still give lenders a good overview of your credit history. They’re also known as ‘eligibility checks’ and are great for establishing the likelihood of acceptance before committing to a hard check.

3. Previous mistakes

Losing sleep over a mortgage you deferred on several years ago? Stressing about a credit card that got out of control in your twenties? The good news is mistakes you’ve made in the past don’t always stay around to haunt you.

For example, County Court Judgments (CCJ) issued when a borrower fails to repay money will stay on your record for up to six years. The good news is that they will automatically be removed after that period.

Black marks like Debt Relief Orders or Individual Voluntary Agreements (IVAs) can also have a negative impact on your credit score but won’t necessarily stay on your record forever.

Buying a car with poor credit

Need help securing a car loan? Whether you’re struggling with poor credit car finance or simply need assistance getting the best interest rates, we’re here to help. At My Car Credit we offer tailored car finance to applicants with all types of credit histories. Thankfully, this includes those with less than perfect scores. Get in touch today by emailing to find out more. We’ll help you secure the keys to your new vehicle as quickly as possible.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating


  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed


  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs


  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit


  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past


  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan

X monthly repayments of

Typical rate

Loan amount

Total payable




*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!