8 min read

The factors affecting your credit score: part three

Frankie Jones
7 May 2019

This article is the third and final in our three-part series looking at the factors that impact your credit score. Check out part one and part two to learn more about what’s affecting your score and how to take control of these behaviours.

Factor 7: Being on the electoral roll

Being on the electoral roll just means being registered to vote. While it might seem insignificant, it’s an easy action to tick off your to-do list and give your score a quick boost.

How this affects your score

The electoral roll is a list of people who are registered to vote in the UK, including their names and addresses. Being on the electoral roll makes it easier for lenders to verify who you are and where you live, which is why it makes up part of your credit report. Banks and lenders will be more likely to offer you credit if you’re registered, as it reduces the possibility of fraud and indicates that you have a stable living situation.

Stability is a quality lenders look for when deciding who to lend money to, as it’s a sign that you’re predictable and are likely to repay debt. In turn, this is likely to improve your credit score. So if this information isn’t on your credit report, your score probably isn’t as high as it could be.

What to do about it

If you’re already registered to vote at your current address, there’s nothing more for you to do! Give yourself a pat on the back and take control of the other factors affecting your credit score (see part one and part two of this series).

If you’re not registered to vote, get on the electoral roll now - it only takes 5 minutes. Visit the Government website to register. If you’re not sure whether you’re registered, you can check here.

If you’ve recently moved house, or plan to move soon, it’s best to register at your new address as soon as possible.

Make sure your electoral roll details are the same ones as on your ClearScore account and any credit accounts you use. If key information (like your name and address) doesn’t match then it might not show on your credit report and you might not get that boost to your credit score.

Why not take a minute to check your details are correct and up-to-date in your ClearScore account? If you think any information showing is incorrect or missing, visit our Help section to fix this.

Factor 8: CCJs and IVAs

CCJs (County Court Judgments) and IVAs (Individual Voluntary Arrangements) can affect lenders' perception of you and have a negative impact on your credit score.

How this affects your score

If you don't repay a lender, they can apply for a judgment from the County Court to reclaim the money you owe. This is called a County Court Judgment (CCJ), and is the lender's way of making sure that you pay. If you pay all the money owed within a month, it won't show up on your report. If not, the CCJ will stay on your report for 6 years.

An IVA is an arrangement between you and your creditors where you agree to repay your debt via monthly payments within a set timeframe. Any charges and interest will be frozen, so you’re purely repaying money you owe. As with a CCJ, an IVA will be visible on your credit report for 6 years.

Credit reference agencies, like our partner Equifax, will make a note of any CCJs or IVAs recorded against your name. These will then be visible on your credit report. Having either of these on your credit file is likely to bring your score down, as it suggests to potential banks and lenders that you’re not creditworthy as you’re struggling to manage your money.

What to do about it

For a CCJ: You’ll get a letter in the post called a County Court form. It’s important to open this straight away, as you have two weeks to respond. You can find information on how to reply to a County Court form on the StepChange website.

It’s always a good idea to get free debt advice from a charity like StepChange, Debt Advice Foundation or National Debtline so they can help you with your payment plan. Once your payment plan is agreed, make sure you pay your instalments on time every month.

Try not to stress yourself out too much if you do get a CCJ - while it will affect your credit score, once you’ve paid it, lenders will pay less attention to it. It will completely drop off your report after 6 years.

Once you’ve got your debt under control, why not take out a credit builder product to help you repair your credit score?

For an IVA: There’s not a lot you can do to rebuild your credit score whilst there’s an IVA on your report, other than following our top 10 tips to a great score.

Once your IVA is complete after 6 years, you’ll receive your signed IVA Completion Certificate from StepChange VA. The Insolvency Service will also mark your IVA as completed and update their records accordingly. Now’s your chance to prove that you’re capable of managing your money and take back control of your credit score.

You might like to take out a credit builder product to get your score up to scratch.

Check your credit score and start improving it today

Factor 9: Personal bankruptcies

Being declared bankrupt - where a trustee takes control of your finances - will stay on your credit report for 6 years and could heavily impact your credit score.

How this affects your score

If you become bankrupt, you’re legally declaring that you can’t afford to repay your debt. Your unsecured debts are written off; it’s generally seen as a last resort, because assets such as your house or car can be sold to pay your debts.

Bankruptcies usually last for 12 months, and you’ll have some financial restrictions during this time, but after a year, you’ll be ‘discharged’.

Being declared bankrupt is likely to bring your score down as it’s a sign you can’t manage your finances, given you’re unable to repay the money you’ve borrowed. While a bankruptcy will be visible on your report for 6 years, the older it is, the less attention lenders will pay for it.

What to do about it

If you’ve gone bankrupt, you’ll need to follow the restrictions for a year until your bankruptcy is discharged. You might be asked to make monthly payments from your spare income (but only if you can afford it, don’t worry).

When your bankruptcy is discharged, you can start to rebuild your credit history. You can do this by taking out a credit builder product, spending small amounts on it and always paying it back in full and on time.

If you’re hoping to avoid being declared bankrupt in the first place, Citizens Advice have plenty of advice for dealing with your debts before your creditors get involved.

To catch up on the factors you’ve missed, check out part one and part two of our credit score factor series.

by Frankie Jones

Frankie Jones is ClearScore's in-house Copywriter. 

ClearScore exists to make your finances simple.
We offer a free service where you can handle everything to do with credit in one place. In your ClearScore account, you can see your credit score and the full details of your credit report. Your credit cards, mortgages, mobile phone contracts, loans, overdrafts and utilities all on the record. Our goal is to make ClearScore as simple, calm and straightforward as possible. Money is stressful enough.