What really Affects your Credit Score

After all the talk about credit rating and scores, many people are trying to understand why their score has gone down. Other than the obvious reasons, there are some surprising causes of getting your rating lowered, and you’d better know about them if you would like to stay credit-worthy. Below you will find a list of actions that will make you look bad in the eyes of credit reference agencies.

Moving home

Whenever you move home, your stability will decrease (according to credit reference agencies). Your score depends on how long you have been a resident at your current address, so as soon as you move home you will be less likely to get credit. Not very helpful when trying to furnish a new house.

Paying off credit

You might think that when you settle your account and close it you would increase your credit rating. However, your score depends on how many active accounts you have. Closing your account will reduce the size of financial portfolio and will never help you increase your score.

Not being registered

You might be living at the same address for a long time; paying the bills and getting your statements to your home, but if your details do not match the social security or electoral register details, it is hard to prove it. The only reliable information is delivered by government sources, so you have to ensure that you are as traceable as can be.

Bad spouse

Your credit score might be absolutely great with no missed payments, but if you move in with someone who hasn’t been so good with money, their rating will damage yours, as you are now responsible for the financial commitments as a couple. Indeed; love is blind but you should ask the question before making a commitment if you want to keep your credit rating.

Changing jobs

You might be made up to get that new job at another company, but even if you earn more this might not be to the benefit of your credit score, either. The longer you stay with the same company the more credit-worthy you will be. The best approach is to try not to change jobs too often, but this is not a main element of rating.

Getting divorced

When you divorce, your income will be calculated on a single occupancy basis. Assuming that you still have to pay the bills from one income instead of two and make your payments on loans and credit cards will reduce the affordability element on your rating.

Debt settlements

If you have had trouble with credit, and made an arrangement with your company, you might think that your rating would automatically go up. Unfortunately, this is not the case; a deficiency balance will affect your credit rating negatively.