Can't understand why your credit score is so low? Five things to check

You’ve been paying your bills on time and cut up your credit cards, so why isn’t your credit score going up?

How your credit score is worked out can feel like a mystery, especially when you think you're doing everything right, and it still refuses to budge. But often, the reason it’s stuck (or unexpectedly dropped) comes down to something small, hidden or easily overlooked.

Here are five common reasons your credit score might be stubbornly staying put, and what you can do about it.

1. You’ve closed old accounts

It might seem like a good idea to close down old credit cards you’re not using, especially if you're trying to get on top of your debts, but this can actually hurt your credit score.

That’s because closing accounts reduces your credit utilisation (how much credit you’re using compared to how much you’ve been offered) and shortens your credit history - both of which are important factors lenders look at.

Tip: If the account doesn’t have fees and you’re not tempted to use it, keeping it open could help boost your score over time.

2. You’re using too much of your credit limit

Even if you’re making every payment on time, using a large percentage of your available credit can lower your score.

This is called your credit utilisation ratio, and the general rule is: try to keep it below 30% of your total limit.

So, if your credit card has a £1,000 limit, ideally, you shouldn’t carry a balance of more than £300.

Tip: If you can’t pay off your balance in full, try to reduce it bit by bit, or ask your provider to increase your limit (as long as you don’t then use more).

3. You’ve applied for credit too often

Each time you apply for credit, a hard search is recorded on your report, and too many of these in a short space of time can damage your score.

It makes lenders think you might be relying on borrowing or are in financial difficulty, even if you’re not.

Tip: Only apply for credit when you really need it, and use ‘soft search’ tools or eligibility checkers to see your chances before applying.

4. There are mistakes on your credit file

A simple error on your credit report, like an incorrect address, a payment marked late when it wasn’t or even someone else’s information being mixed in with yours, can pull your score down unfairly.

Tip: Check your credit report regularly through free services like ClearScore, Experian or TotallyMoney and raise a dispute if you spot something wrong.

5. You’re not on the electoral roll

Registering to vote doesn’t just let you have your say at election time, it can also give your credit score a boost.

Lenders use the electoral roll to verify your identity and address, so if you’re not on it, you might be seen as a higher-risk borrower.

Tip: Register to vote online.