WARNING: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Credit Score

What Is Bad For Your Credit Score?

March 19, 2020

Five main factors make up your credit score. These are payment history (35%), credit utilisation (30%), credit history length (15%), credit mix (10%) and new credit (10%). Your credit report is usually updated once a month.

Missed Payments

Having missed payments can harm your credit score. Having as little as one missed payment can have a negative effect, but several will unmistakably damage it further. Companies that are aware of your missed payments may be unwilling to approve your application, as they don’t trust their payments will be made on time.

High Credit Utilisation

Companies prefer to see your credit utilisation around 25% – any higher may imply that you are too reliant on credit. The company you are applying with may come to the decision that you cannot handle any more credit, therefore won’t approve you for any more.

Frequent Credit Applications

Making numerous applications in a short space of time may hurt your credit score as it can suggest you have been declined for credit with each company.

Defaulting on Accounts

Negative information, such as bankruptcy and repossession, can stay on your credit file for years. A default on your account shows that you have previously struggled to repay credit which makes you a much higher-risk customer.

Low Credit Mix

There are two main types of credit: revolving credit and instalment credit. You can use revolving credit again – re-using your credit card once you have paid it off. You cannot re-use instalment credit, such as a loan. Companies also like to see you using various types of credit – for example, a credit card, a mortgage, car finance and a student loan. A low credit mix can imply that you can’t handle any more.

Your social media score will be accessible to some companies, therefore having a weak social score may influence a company’s decision when deciding whether to lend to you.

To check your social media score, head over to Notty here: https://www.notty.co.uk/.

To find out what’s good for your credit score, check out our previous blog!

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A short term instalment loan should be used for short-term financial needs only, and not as a long-term financial solution.Never borrow an amount that cannot be repaid on your next pay period date. Missing repayments may have a negative effect on your credit rating and make it more difficult for you to obtain credit in the future.

The operator of this website is not a lender or short-term instalment loan provider, and does not make loan or credit decisions. We are a matching service connecting consumers interested in obtaining short-term instalment loans in amounts between £100 and £8,000 with participating lenders or brokers in our network.

We do not charge you any fees to use our websites, services or products.Any commission received by us is paid by participating lenders or brokers if you choose one of their products or for referring you to them.

If you are matched with a participating lender or broker, you may be charged a fee directly by the participating lender or broker. Please be sure to read their terms and conditions before proceeding with any loan arrangement.

Not all lenders within our network can provide up to £8,000 and there is no guarantee that you will be accepted by a participating lender or broker.

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