Why Has My Credit Score Gone Down? Causes & How to Fix It

Your credit score is a number that tells lenders how likely you are to repay what you borrow. A good credit score is important because it opens doors. It can help you get approved for mortgages, credit cards, car finance, and personal loans, often at better interest rates.

Lenders use your credit score alongside your credit report to decide whether lending to you is a risk worth taking. The higher your score, the more likely lenders are to see you as one of their low risk applicants. A low credit score, on the other hand, can mean higher interest rates, lower credit limits, or even rejected applications altogether.

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Even a single missed payment can negatively impact your credit score. Lenders report missed payments and late payment records to credit reference agencies, and this information stays on your credit report for up to six years. Whether it's a credit card bill, a loan repayment, or other household bills like your mobile phone contract, if you miss the due date, it gets recorded.

Multiple missed payments can lead to a much lower score over time. If you're facing financial difficulties, speak to your lender before you miss a payment, most lenders offer support to help you stay on track.

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Your credit utilisation ratio is the percentage of your available credit limit that you're currently using. For example, if your total credit limit across all cards is £5,000 and you've spent £2,500, your credit utilisation is 50%. Most experts recommend keeping your credit utilisation ratio below 30%.

When you use a high proportion of your available credit, lenders may view you as someone who relies too heavily on borrowing. This can negatively impact your credit score even if you're making all your credit repayments on time.

Every time you apply for new credit, whether that's a credit card, loan, or car finance, the lender usually carries out a hard credit search on your credit report. Each of these hard credit searches leaves a mark on your file.

Making repeated credit searches or multiple credit applications within a short period can signal to lenders that you're in financial difficulties or desperate for borrowing. Lenders measure risk carefully, and too many applications in a short space of time can lower your credit score.

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Closing accounts, particularly old ones can have a surprising negative effect on your credit score. When you close an old account, you reduce your total available credit, which can push your credit utilisation ratio higher. It also lowers the average age of your credit history, which lenders like to see as long as possible.

Similarly, opening new accounts introduces hard credit searches to your credit report and reduces that average age further. A mix of credit types (credit cards, loans, overdrafts) managed well over time is something lenders look for.

Sometimes your credit score drops and it's not even your fault. Inaccurate information on your credit report, such as a payment incorrectly marked as missed, or an outdated home address, can drag your score down without you realising.

That's why it's so important to review your credit report regularly with each credit reference agency. If you spot something wrong, you can raise a data dispute directly with the relevant agency. They're legally required to investigate and correct any errors. Keeping your credit report error free is one of the easiest ways to protect your score.

If you share a joint account with someone, a partner, family member, or housemate, their credit behaviour can affect your credit score. When you open a joint account, you become financially linked. This means lenders can see their credit record alongside yours when assessing your applications.

If the other person has missed payments, defaulted payments, or a poor credit history, this association could negatively impact your own score. If you've separated from someone you shared finances with, contact the credit reference agencies to request a financial disassociation. This removes the link from your credit report and stops their financial activity from influencing your score in the near future.

Moving house is one of the most commonly overlooked reasons for a credit score drop. When you change your home address, your address history gets shorter at the new location. Lenders prefer to see stability, and a long time at the same address is seen as a positive sign.

More importantly, if you don't update your details on the electoral register when you move, it can seriously impact your credit score. Being registered on the electoral roll at your current home address helps lenders confirm your identity and prevent fraud. Make sure you get the electoral register updated as soon as you move.

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The most serious marks on your credit record are county court judgements (CCJs), defaulted payments, and individual voluntary agreements (IVAs). These are recorded when borrowers have experienced significant financial difficulties and have failed to meet their credit agreements.

A CCJ is a legal order issued by a court when you haven't repaid money you owe. Defaulted payments occur when a lender closes your account after prolonged non-payment. Individual voluntary agreements are formal arrangements to repay debts over time.

All three remain on your credit report for up to six years from the date they're registered, and they can have a severe negative effect on your ability to get approved for new credit.

If your credit score has gone down and you can't work out why, it's worth checking whether you've been a victim of identity theft. Fraudsters can use your personal details to open credit accounts in your name, run up debts, and then disappear, leaving you with the damage on your credit record.

Check your credit report for any accounts or credit applications you don't recognise. If you spot anything suspicious, report it immediately to the relevant agency and to Action Fraud.

In the UK, there are three main credit reference agencies: Experian, Equifax, and TransUnion. Each one collects information about your financial activity from lenders, banks, and public records, then uses its own scoring model to calculate your credit score.

The information credit reference agencies hold about you includes your credit history, payment records, credit applications, any county court judgements, and your electoral register status. Because each agency uses a slightly different scoring system, your credit score may vary between them. That's perfectly normal.

What matters most is the underlying data on your credit report. Lenders look at this rather than any single number. Checking your report with all three agencies gives you the most complete picture of your credit health.

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Now that you know why your credit score has gone down, let's focus on what you can do about it. The steps below can help you rebuild and improve your credit score over time.

Start by pulling your credit report from all three credit reference agencies. Look for any inaccurate information, wrong addresses, payments incorrectly recorded as missed, or accounts you don't recognise. If something is wrong, raise a data dispute with the relevant agency and ask them to investigate.

Getting your report error free should be your first move, because even small inaccuracies can impact your credit score unfairly.

Aim to keep your credit utilisation below 30% of your total credit limit, and ideally even lower. If your balances are high, try paying them down steadily rather than all at once. Even small, consistent reductions can help improve your credit score.

Avoid maxing out any single credit card, as lenders look at both your overall credit utilisation ratio and individual account usage. If possible, spread spending across accounts rather than loading it onto one.

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One of the quickest wins for your credit score is making sure you're on the electoral roll at your current home address. This helps lenders verify your identity and confirms where you live. If you've recently moved, get the electoral register updated straight away, you can do this through your local council's website.

Also make sure your address is the same address listed across all your accounts like your bank account, credit cards, and any loans like same day loans.

Building a strong credit score is about long-term habits. Pay your bills on time, that includes credit repayments, household bills, and other household bills like broadband or water. Set up direct debits so you never miss a due date.

Try to manage credit across different account types, such as a credit card and a small loan, to show lenders you can handle a mix of finances responsibly. Avoid borrowing more than you can comfortably repay.

Every new credit application adds a hard search to your credit report. Too many in a short period makes lenders nervous, it looks like you're scrambling for money. Space your applications out and only apply for new credit when you truly need it.

Before applying, use eligibility checkers that rely on soft searches so you can see your chances of approval without affecting your score. If you've been declined, resist the urge to apply elsewhere immediately.

How long it takes for your credit score to recover depends on what caused the drop. Minor issues like a slightly high credit utilisation ratio or a single hard search might only affect your score for a few months. More serious marks take longer. Missed payments, defaulted payments, and county court judgements can stay on your credit report for up to six years.

The key is consistency. The more time that passes with responsible financial behaviour like paying on time, keeping balances low, and avoiding unnecessary credit applications, the more your score will recover. Even small improvements each month add up. Don't expect overnight results.