Many people believe that if you have a good solid income and not much borrowing history, then you must have a good credit. However, this isn’t strictly true. If you have bad credit, then you may think it’s impossible to get accepted for any sort of loan or finance. In particular, if you are looking for car finance with bad credit you may have the same view as many people and think it can’t be done. However, your credit score plays a massive part in your ability to get accepted for finance. If you have bad credit, then you may know exactly where you’ve went wrong or you might not have a clue. One of the biggest ways to harm your credit score is regularly missing payments. However, there are many other factors which can negatively affect your credit score.

What is a credit score?

Your credit score can be found on your credit file and can be obtained when you run a credit check on yourself. You can check your credit file for free online using a reputable credit referencing agency such as Credit Karma. Your credit score is based on your financial history and a few different factors which we will discuss in more depth. Your credit score helps lenders determine whether you qualify for their loans or services such as credit cards, car finance, mortgages and personal loans. Credit scores can change over the years, depending on your borrowing history and ability to meet repayments.

Lack of credit

One of the factors that many people overlook is the amount of credit you have. Now, we’re not saying go and get huge amounts of credit to show you have credit. We mean that many people believe that having no credit means they have a good credit score. However, you can’t show evidence that you are a responsible lender because you haven’t taken out any credit in the past. You could consider a credit building card to get you started. You can make a few small purchases on it each month and then pay them back in full the month after. This can help to increase your credit score and make it easier for you to get approved for other loans.

Register on the electoral roll

It may come as a surprise that being registered on the electoral roll can affect your credit score. The electoral roll is a list of all the people registered to vote in the UK and information on the electoral roll is often used in determining your credit score. Even if you don’t want to vote in the UK, it’s a good idea to register to vote. This is because potential lenders can use the electoral roll information such as full name and living address to verify that you are who you say you are and also stop fraudulent claims.

Missed payments

One of the easiest ways to negatively impact your credit score and see it decline month on month is to continuously miss payments. Missing payments completely or making late repayments can have a detrimental effect on your score. It also puts lenders off from giving you any more credit because according to your history, your likely to not pay it back on time. If you are struggling to keep up repayments, you shouldn’t ignore it or cancel any direct debits. Speak to the company providing the finance, credit or loan and ask how they can help you. When you take out a credit agreement, you are signing a legal document which can have prosecution consequences if you fail to stick to your agreement. In some cases, missed payments can stay on your credit file for up to 3 years!

Multiple applications in a short space of time

When you make a hard search application, it is recorded on your credit file. This means you will be able to see it, but also potential lenders will too, and they can also see the outcome of this application. Multiple hard search applications in a short space of time can harm your credit score. This is because it indicates to lenders that you are desperate for credit and keep getting declined. If you want to shop around for credit or finance, make sure you stick to soft search applications only. These enable lenders to take a ‘quick’ look at your credit file and not the full thing and it also won’t be recorded on your credit file. If you are applying online, the lenders website will usually tell, you if they are going to perform a search that will affect your credit score.

CCJs, defaults and bankruptcy

Having a County Court Judgement (CCJ), default or bankruptcy listed on your credit file can seriously affect your credit score. All of the above are different but mainly suggest that you continuously failed to make missed payments or have too much debt that you couldn’t pay off. Any of these on your credit file can stay on there for up to 6 years and many lenders will never provide finance if you have any of the above.

Credit utilisation

If you have been accepted for a credit card or loan, then great! However, you should consider the credit utilisation ratio. This ratio is calculated by the credit available to you and how much of it you use. As a rule, you should only use around 50% of your available credit limit, or 25% if you can. Responsible lending can positively impact your credit score and you can show lenders that you aren’t reliant on credit. If you are constantly maxing out credit cards and overdrafts, lenders may think you already have too much available credit.

Financial links

When you take out a joint application with someone else, you become financially linked. For example, you may want to take out a mortgage with someone or a joint car finance application. This means that you both become financially responsible for paying back a loan and you could both be implicated if you fail to stick to the terms of the credit agreement. If you no longer have any active credit with someone who you are financially linked too, its best to disassociate yourself from them. If they have a low credit score, it can negatively impact yours too. Any financial partners will be listed on your credit file and you can ask your credit referencing agency who provided your credit report to remove this link.


Founder of in 1998 and constantly strives to change peoples attitudes to the town, Brian is a self described Paisley Digital Champion who promotes Paisley via any means necessary. You can also follow me on X