"Bad credit" usually means your credit history makes lenders see you as a higher risk. This can make it harder to be accepted for credit, or mean you're offered higher rates or lower limits. It isn't permanent. Most negative information drops off your credit report after six years, and recent behaviour counts for a lot.

This guide explains what bad credit means, what causes it, how it can affect you and the steps that can help rebuild your credit. Charts in this article use anonymised ClearScore data. They show patterns across large groups of users, not cause and effect, and your own results will vary.

ClearScore is a credit broker, not a lender.

What does "bad credit" mean?

There's no single credit score in the UK. The three main credit reference agencies (Experian, Equifax and TransUnion) each use their own scale, and lenders use their own scoring and criteria when they decide whether to lend to you.

ClearScore shows your Equifax score, which runs from 0 to 1,000. Scores up to 409 fall in ClearScore's lowest band, "Let's start climbing", and the next band, "Moving on up", runs from 410 to 519. Read more: what is a good or bad credit score?

What can cause bad credit?

Fading relevance: lenders mainly look at your most recent activity, so older entries usually count for less as time goes on, even before they drop off your report.

Other things can also count against you:

• using a high share of your credit limits (high credit utilisation)

• making lots of applications in a short time

• having little or no credit history, which gives lenders less to go on

• not being on the electoral roll at your current address

• a financial link to someone with a poor credit history, such as a joint account

• mistakes on your credit report

What a missed payment can do

On average, ClearScore users lost about 48 points one month after missing a single credit card payment. People with higher scores tended to lose more, around 76 points for those starting between 700 and 899, compared with about 9 points for those starting below 300. Missing payments on several cards at once was linked to bigger, longer-lasting falls. Users who missed payments on three or more cards in the same month saw their scores keep falling for at least three months.

How bad credit can affect you

Your chances of being accepted

Among ClearScore users who applied for a credit card, about 42% of those with scores below 100 were declined, compared with about 18% of those scoring 700 or more.

What you're offered

Lower scores were linked to higher rates. The median credit card APR was 39.9% for scores below 400, falling to 26.9% for scores of 800 or more. For personal loans, the fall was steeper: from 48.7% for scores below 300 to 9.8% for scores of 800 or more. Credit limits also tended to be lower. The median credit card limit was £350 for scores of 199 or below, rising to £1,500 for scores of 800 or more.

Other areas of life

A poor credit history can also affect:

• Mortgages: some lenders specialise in applicants with lower scores or more complicated histories. Among ClearScore users who took out a mortgage in the 12 months to mid-September 2026, the median score was 792 at high-street lenders, 764 at building societies and 667 at specialist lenders.

• Phone contracts: a credit check is usually needed for pay monthly deals. Read more:

  mobile phone deals with a poor credit score.

• Renting: letting agents may run a credit check or ask for a guarantor.

• Energy: a supplier may ask for a deposit or offer a prepayment meter.

Eligibility and acceptance are decided by each lender and depend on its own criteria and checks. Checking your eligibility does not guarantee that you'll be accepted.

The cost of high-cost borrowing

When it's harder to get mainstream credit, people sometimes turn to more expensive options. Their costs can be very different.

In this example, borrowing £1,000 for 30 days cost about £25 in interest on a credit card at a 34.9% interest rate (illustrative), compared with £240 on a payday loan at the maximum rate. FCA rules cap payday loan interest and fees at 0.8% a day, and the total cost can't be more than the amount borrowed.

High-cost borrowing can be hard to stop using. Of more than 400,000 ClearScore users with short-term credit, home credit or payday loans in January 2025, 71% were still using this kind of borrowing a year later.

If you're finding it hard to keep up with payments, free and confidential debt advice is available (see below).

How to check your credit report

• Check all three reports. Lenders may use any of the three agencies. You can see your Equifax report and score free with ClearScore, and get your reports from Experian and TransUnion for free.

• Look for mistakes, such as accounts you don't recognise, wrong addresses, or payments marked as missed when you paid on time. If you find one, raise it with the credit reference agency, which will check it with the lender.

• Add a notice of correction if something is accurate but there's context lenders should know, such as a missed payment during an illness. A notice of correction can be up to 200 words.

• Ask for a "notice of disassociation" if you're still linked to someone you no longer have any financial connection with, such as an ex-partner you had a joint account with.

How to rebuild your credit

Register on the electoral roll

The median score for ClearScore users on the electoral roll was 676, compared with 443 for those not on it. Being on the electoral roll does feed into your credit score. But registering won't add 230 points by itself, because the gap also reflects other differences between the two groups. Being on the roll also helps lenders confirm who you are and where you live.

Register to vote on GOV.UK.

Pay on time, every time

Payment history is one of the most important parts of your credit report. Setting up Direct Debits for at least the minimum payment can help you avoid missing payments. The effect of a single missed payment can lessen over time. Among ClearScore users, scores partly recovered within three months of a single missed card payment.

Keep your credit use low

Credit utilisation is how much of your available credit you're using. Among ClearScore users who started above 30%, those who brought their utilisation below 30% generally saw their scores rise. The biggest gains were for those starting over their limit, at a median of +42 points over 12 months. Keeping it low mattered too. Users who dropped below 30% and stayed there saw a median gain of 14 points, while those who went back above 30% saw no change.

Space out applications

Each full application leaves a hard search on your report, and several in a short period can count against you. Eligibility checkers use a soft search, which other lenders can't see, to show how likely you are to be accepted before you apply.

Being declined once doesn't always mean you can't get credit. Of over 35,000 ClearScore users with a decline that were tracked for 6 months, 52% of these declined applicants got a credit card within six months: 21% from the same lender, 31% from a different lender. Among those who went on to get a card, the typical wait was 3–6 weeks.

Build a credit history if you don't have one

New-to-credit ClearScore users who added one payment account, such as a phone contract, a utility account or a credit card, saw their score rise by an average of 67 points over 12 months. Those who didn't add one saw an average fall of 7 points (ClearScore data, about 150,000 new-to-credit users).

Credit-builder credit cards are designed for people with limited or poor credit histories. They usually have lower limits and higher interest rates than other cards, so paying the balance in full each month avoids interest.

If you're struggling with debt

If you're finding it hard to keep up with payments, contact your lenders as early as you can. They have to treat you fairly and may be able to offer a payment plan or other support. Free, confidential debt advice is available from:

• StepChange

• National Debtline

• Citizens Advice

• MoneyHelper's debt advice locator

In England and Wales, a debt adviser may be able to start a Breathing Space for you. This generally freezes interest, fees and charges and restricts creditor enforcement action for 60 days on qualifying debts included in the scheme, while you get advice. It isn’t a payment holiday — payments on included debts generally still need to be made, and your debt adviser can explain exactly which debts and requirements apply to you. There’s a longer version for people receiving mental health crisis treatment.

This article is for general information and isn't financial advice. It doesn't cover the whole market, and products not mentioned here may suit some people better. ClearScore is a credit broker, not a lender.