Your credit score is quite fluid and can go up or down because of changes to your report.
It might be worth looking through the '
changes’ and ‘
Insights’ sections of your report to see what might have caused your score to drop.
That said, below are some factors that can affect your credit score:
- Judgements/legal action
Legal actions are likely to lower your credit score as you may seem less likely to repay any credit you borrow.
- Current debt
If your debt levels are quite high, this can make it look like you’re overly reliant on borrowing, which could cause your score to drop.
- Missed/late payments
Missing payments can cause your score to fall as it throws doubt on your ability to pay off future debt in full and on time (as agreed with your provider).
- Balance changes
If there’s a change to your balance, your lenders will notice that you’ve changed your spending behaviour which might cause your score to drop.
- Opening accounts
Opening a new credit account can cause an initial drop in your credit score. This is because there might be an enquiry added to your report, and this new account will lower the average age of your credit agreements.
As you build your account history and prove that you can handle credit responsibly, this will likely have a positive impact on your credit score over time.
- Closing accounts
If you’ve recently closed an account, your score can change as your rate of credit utilisation changes. This will lower the variety of credit accounts you have, as well as their average age.
Likewise, if an account drops off your report, you could lose that account's positive contribution to your score.
- Enquiries – An enquiry shows up on your credit report when a lender checks your file. This is a background check carried out when you apply for credit, or sometimes when you apply for a new job or renting - this is perfectly normal.
Try to avoid having too many credit application enquiries on your report in a short amount of time. This can lower your score as it suggests you’re reliant on credit and might struggle to pay it all back.