We answer below your queries on how making regular credit repayments can affect your credit rating.
Though making your credit payments in a timely manner is always a great way to make sure your credit rating stays in good shape, it doesn’t automatically mean that your credit rating is going to be as high as it could be.
If you already have a great credit rating, the temptation will be there to apply for more credit - you’ve got the great score, why waste it? Indeed, a healthy credit score will make it easier to get accepted for credit, but you should be careful. Too many applications in a short space of time can be deemed unattractive to lenders and could bring your credit rating down because you could be deemed credit hungry.
It’s also a good idea to make sure all of your credit arrangements have been updated to your latest address, and that you’re on the Electoral Roll (now a legal requirement) so lenders can trace your history and know where you are.
Another factor which could affect your credit rating would be how much credit you have access to, and if you're using it all. Even if you make your repayments, if you're using over 85% of your available credit (such as credit card limits, for example) you may have issues when applying for more credit. This is because it could indicate to lenders that you're nearing the top of your affordability, which is referred to as 'over-utilisation'.
For a list of potential factors that can negatively affect your credit rating, visit the Credit Clinic Causes page. Here we detail some of the most common issues that can lower your credit rating, as well as explanations on each different credit rating, ways you can start repairing your credit file, and links to resources that can provide impartial advice. Find out more at the Credit Clinic Causes page.
If you require further assistance, our team of Customer Advisors are here to help. We're open six days a week - you can view our opening hours here - and we're more than happy to answer your questions.