by Kirsty O'Lone

Created on: May 28, 2011   Last Updated: May 31, 2011

When you make an application for credit the lender will use the information you give them on your application along with information on your credit file to decide whether to approve or deny your request. There are many factors taken into account and every lender has their own lending criteria but one thing almost every lender will look at is your credit score. If your score is not high enough to meet that lenders criteria then they will decline your application. A low credit score could prevent you from obtaining credit, so it is important to understand not only how to improve your score, but also how your score gets lowered in the first place.

The most important thing for lenders is that they are able to confirm your identity and the most common way to do this is to check the electoral register, so if you are not registered to vote this will significantly lower your credit score. Also because almost all lenders consult credit reference agencies when making their decisions it is important to make sure that your details on your credit file are accurate, even a small discrepancy with your address can make a big difference to your credit score as a lender may not be able to accurately confirm that you are who you say you are and you live where you say you live.

Lenders look for stability in their potential customers, so if you have recently moved house this may reflect badly on your credit score, especially if you have moved a lot. If you have recently moved house, but previous to that you lived at the same address for ten years then that might not look as bad as if you have moved house every year or so for the last several years. Many lenders also consider your residential status when deciding whether to lend to you or not, this means that if you are a homeowner you could be looked on more favourably than someone who rents their home or lives with their parents.

Of course your past credit history has a lot to do with your credit score, if you have missed a lot of payments in the past then lenders may see this as a habit and assume that you will do the same to them should they lend to you. A few late payments is not going to be the end of the world but if you have missed payments altogether, or have been consistently late in making payments then this will certainly lower your credit score

If you have any defaults or County Court Judgements on your credit file then you will certainly have lowered your credit score considerably. This is one of the worst things a

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