Credit files and credit scores can get confusing, but we’re here to make it simple. This guide will explain what a good credit score is, how to check it, and the factors than can affect it.
If you have a low credit score, we understand that it might feel frustrating, but Lowell is here to help. A good credit score can help you get better rates on credit cards, loans, a mortgage, and even new phone contracts. If you’ve set up a payment plan, you’re already on your journey to becoming debt-free with Lowell. But there are still other steps you can take to help improve your credit score in the meantime.
In this guide, we’ll be covering the following:
This content is intended to be an impartial guide regarding credit scores and how they can be improved. Lowell Financial Ltd does not offer financial advice. You can find out more about the organisations you can contact in our guide on debt help and support.
Your credit score is a key indicator of your financial health. It’s calculated based on information held in your credit file, such as credit accounts and payment history.
There are three Credit Reference Agencies (CRAs) in the UK - Experian, Equifax, and TransUnion – that use this information to give you an overall credit score. Each agency has its own method, so your score may vary slightly depending on which you use.
In the UK, your credit score plays a big part in how lenders view you – it helps them decide if they’ll lend you money and under what conditions. Here’s how a good credit score could help you.
A good credit score means you’re more likely to qualify for loans, credit cards, and even renting or buying a home.
Usually, the higher your score, the better your chances of getting the credit limit you need.
A good credit score can help you to secure loans and credit cards at a lower interest rate, saving you money.
Some insurers may offer you lower premiums if your credit score is good. You can find free and independent information on credit scores at Money Helper.
Credit scores aren’t like a test, and the number they show isn’t final. You can keep working to improve your credit score, even while you’re still paying off what you owe. Here are some of the factors that can affect your credit score:
If your name isn’t on the electoral register, you might find it harder to get credit. You can register to vote online at Gov.uk – it’s quick and easy. If you move home, you’ll need to update your details.
It’s not always in your control, but lenders like stability. Staying at the same address for a while suggests you’re financially secure and may be viewed as a lower risk.
Longer credit histories show lenders you’re a responsible borrower. Switching current account providers sometimes comes with incentives but doing this can negatively affect your credit score.
If you’re just starting, build your credit history by making timely payments on things like credit cards and loans.
This type of credit card is designed for people with lower credit scores. They usually have lower spending limits and higher interest rates. If you use it for a small amount of spending each month and pay it back on time and in full, it can help improve your score.
When you look at your credit file, check that your details are correct. Even minor errors in your address or personal details can affect your score, so you should always get them corrected. There might be mistakes about certain debts and types of credit too, which could be harming your score. If you see an error, contact the CRA and ask them to fix it.
If you have outstanding debt, paying this off before applying for more credit could help improve your credit score. If you have debt with Lowell, we’re here to listen and help manage your debt with an interest-free payment plan, so you can start working to become debt-free.
Requesting limit increases on your credit cards can also positively impact your credit score as long as you continue trying to reduce the balance.
If possible, try to keep up with payments on time, as missed payments and defaults registered on your credit file can harm your credit score. Ensure you have direct debits set up to pay at least minimum payments. Also, try and avoid being overdrawn each month.
We know it can be difficult, especially if you’re going through tough personal circumstances. So if your account has been defaulted or is in arrears because no payments are being made, by speaking to Lowell and putting a plan in place, your credit file should be regularly updated to show that you’re making payments toward your debt. Once the debt is paid in full, the default will be marked as ‘satisfied’.
Your credit utilisation rate is basically how much of your available credit you use. Say you have a credit limit of £1,000 and you use up £500, your credit utilisation will be 50%. If it’s too high, it can lower your credit score. Keeping it around 30% can help improve your score.
If your joint account holder has a low credit score, it could bring yours down too. Consider closing any unnecessary accounts or contacting the CRA to remove links to past partners.
We know it’s frustrating, but it can take time to improve your credit score. Some actions, like registering to vote, may help to improve your credit score quickly, while other things like a new bank account or credit card, can take several weeks to show on your report.
Meeting all your repayments and repaying your accounts regularly all help in the long run. Lenders want to see a history of good borrowing, so it’s not something that happens overnight. If you have anything like missed payments or County Court Judgements (CCJs), these can stay on your file for as long as six years.
Your credit score might be slightly different with each of the three UK credit reference agencies, as each use their own methods to work out your credit score.
Remember, while it’s beneficial to have a good credit score, it’s helpful to work towards healthy credit habits by keeping up with payments where possible and making sure your information is always accurate and up to date.
*Correct as of 14 March 2025
Your credit score might be low for a few reasons. For example, if you have credit agreements that are in arrears due to missed payments or have had a default or County Court Judgement (CCJ) recorded on your file, these could impact your score.
If the utilisation rate on your accounts is high, this will also negatively impact your score. For example, where your balance-to-limit ratio is high, such as on credit cards. A high number of searches from credit applications can also be a negative indicator, as it demonstrates a consumer is trying to get a lot of credit or is potentially being declined elsewhere.
If you’re concerned about debt impacting your credit score, there could be ways to lessen the effect. For example, setting up an affordable payment plan towards your debt will be reflected on your credit file and show lenders that you’re working towards clearing your debt. If you have an account with Lowell you can do this online, or by contacting us.
You might have heard about the 15-3 rule to help improve your credit score. The idea is that you make your first credit card payment 15 days before the bill due date (often this will be your minimum payment). You then pay the remainder of your bill, or whatever you can afford, three days before the due date. While there’s no clear evidence it boosts your score, it may help you stay on top of payments and avoid late fees.
There isn’t a set credit score that you need to get a mortgage. When you apply for a mortgage, a lender will go to the credit reference agencies to request a report and credit score, to help them work out if you’re likely to pay back the mortgage.
However, each lender might have their own way of deciding whether you’re eligible for a mortgage. Their decision is likely to include looking at your credit score, but it’s not the only thing they’ll look at. They might also consider information you’ve given on your application, or information they already have about you, for example, if you’ve been banking with them.
You can find independent guides online at sites like Money Helper on how to improve your chances of getting a mortgage if you have existing debt.
If you have a debt with Lowell that’s in arrears due to a lack of payment or has defaulted, it could be impacting your credit score. However, if you’re making payments and working with Lowell towards clearing your debt, we’ll regularly update the outstanding balance on your credit file to reflect this, which mortgage lenders will see when they review your application. Once your debt is paid in full, it will be marked as ‘satisfied’ – showing lenders you’ve taken care of it.
If you can afford it, paying off your credit card early can help improve your score. You’ll also avoid paying interest and late fees.
Buy Now Pay Later services share their information with credit reference agencies. If you manage it well and make payments on time, it may help your score. On the other hand, if you miss payments, it may negatively impact your credit score.
It’s important to remember that your credit score isn’t final, and it can change. You have the power to continue to work and improve it. If you’re concerned about a Lowell debt impacting your credit score, you can get in touch with our friendly team and start taking back control of your Lowell debt by working with us.
For more helpful guides and tips, head to our Debt Guidance Hub.
First published by Darren Yates on 23rd November 2020
Edited on 30th April 2025
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