Factors That Will Impact Your Score Negatively

In this short blog we’re going to talk about the seven main factors that impact your score negatively. Does the thought of checking your credit file regularly make you feel a little woozy? It’s important not to worry because you’re not alone in feeling that way, the whole process of your credit file and keeping a good score is difficult especially when you don’t really understand how it all works.

But if you break it down and go from the beginning it’s much simpler than you may think, and in reality there is just a file about you that helps lenders decide how reliable you are and how likely you are to pay money back that you’re not borrowing. Building and repairing your score is a pretty lengthy process but believe us it will all be worth it in the end, provided you follow the right steps you will be on your way in no time.

1. Late Repayment

To you missing or making a late repayment may not be that much of a big deal at all, and it’s not uncommon for it to happen and it can easily slip someone’s mind. But missed or late repayments can stay on your credit file for up to 6 whole years and could have a huge knock on effect. If your one of those people who are quite forgetful and often forget to make payments it’s a good idea to set up a standing order or overdraft with your bank,

2. Defaulting On Debt

Not paying off your debt at all is going to be a huge problem and reflecting negatively, in fact we rank it as one of the worst when it comes to demolishing your credit score. It just shows lenders that you are incapable and unreliable. Repay any debt as quickly as possible this reflects positively and shows future lenders you are a reliable candidate. Sometimes you may have the opportunity to give and explain as to why you have defaulted. It’s important you take the time to do so, sometimes with illness and redundancy it shows that it wasn’t completely your fault. If all else fails you just need to ride the storm and wait until your credit score repairs itself unfortunately.

3. Avoid CCJs

A county court judgment otherwise known as a CCJ is a letter from the court demanding you pay a debt that you owe so it’s not a surprise that this will impact your credit score massively. If a CCJ does happen to pop up on your credit file this could make gaining credit in the future tricky and remains on your file for 6 years. Should you receive a CCJ if paid in one month your credit file won’t be affected.

4. Not Being On The Electoral Roll

This gets overlooked a lot but being on the electoral roll could help you massively when obtaining credit.

5. Using A Credit Card To Withdraw Cash

Every time you make a cash withdrawal on your credit card it reflects on your credit score. Although you may not be experiencing money problems, withdrawing cash from your credit card implies you do and could be a potential red flag for lenders. Always make sure and cash you withdraw is with a debit card, if you can make a purchase on your credit card rather than a withdrawal.

6. Mistakes

Mistakes on your credit file may reflect highly negativity on your credit score. Checking it these days is so easy there are sites like Clear Score and Experian.

7. Applying For Multiple Lines of Credit in One Go

Applying for lots of credit in one go is a huge red flag to lenders, even if you have a healthy credit score, applying for lots of credit still reflects negatively.