Credit Scoring - Reasons for a Bad Score

Bad Credit History

Your history accounts for about one third of your credit score. It's not only County Court Judgements or defaults on your credit report that have a negative impact. Missed and late payments will also reduce your score. Negative entries stay on your credit file for 6 years, the impact of missed and late payments reduces over time. If you have been making payments on time for at least the last 12 months those negative entries will begin to have less influence your score.

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At current address less than 3 years

Your score will be higher if you have been at the same address for 3 years or more. There may be some impact if you have had two addresses in the last 3 years, but probably less if you are a homeowner. Many addresses in the last 3 years will have the greatest impact. Likewise, your credit score may be effected if you have been at your current address for less than 6 months. This means that tenants are most likely to be hit by their scoring criterion.

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Lack of Employment continuity

Lenders are looking for someone who has had the same job for a number of years. Having had two employers in 3 years or Changing jobs for more money will usually not cause any problems, though it's better to have been in a new job for a few months before applying for credit as lenders often ask to see recent pay slips when applying for a loan.
Since continuous employment is what they like to see, periods unemployment between jobs and have 3 or more jobs in the last 3 years will adversely effect your credit score.

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Multiple Credit Applications

Each time you apply for credit, your credit file I checked which is recorded on the file. Many applications in a short space of time will negatively impact. Such applications may be perceived as indicative of someone desperately trying to obtain credit.
A single credit application every month or two has little impact on your credit file. If you have recently made a number of applications and been declined, it is advisable not to make any new applications for 6 months. This also gives you time to review your credit file and determine if there is anything on there that shouldn't be.

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No or New Bank Account

Lenders will award maximum points if you have been with your bank for a number of years. Having only recently opened your current account will reduce the score. Not having a bank or current account is worse.

Not on the Electoral Register

If you are not registered to vote at the address on a credit application, there is a higher change of rejection.

Same surname and same address with bad credit

The credit record of anyone with the same surname at the same address is taken into account, which can have a positive or negative impact. Even if this person is unrelated to yourself or has moved out before you moved in and your not even aware of them - this can have an adverse impact on your credit record should they have black marks against their credit report.

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