A finance expert debunks common credit score myths for ATV Today Lifestyle…
Drafty has shared with ATV Today Lifestyle some of themost common myths about credit scores that could be holding back millions of Brits from managing their finances effectively. Andrew Wayland, VP of Customer and Proposition at Drafty, said many people have misconceptions about what affects their credit score, which can cost them in higher interest rates and rejected applications.
Research from YouGov shows that 17% of UK adults have been turned down for credit products, with many unaware that simple misunderstandings about credit scoring could be the cause. Andrew Wayland, explains “The biggest myth I see is people thinking there’s a credit blacklist that automatically stops them from borrowing, but that’s not true. There’s no universal blacklist shared between lenders. Each lender decides based on their own criteria and risk levels.”
“Another common belief is that checking your own credit score can harm it. This is also not true. When you check your own score, it creates a ‘soft search’ that lenders can’t see and it doesn’t affect your score at all.”
Wayland pointed out that many Brits mistakenly believe debt is bad for credit scores, which leads to counterproductive financial behaviours. “Some debt, managed responsibly, actually helps build a credit history. Lenders want to see evidence you can borrow money and pay it back reliably.”
Another myth that he debunked is that closing old credit accounts improves your score. “In reality, closing accounts can harm your score. It reduces your available credit and shortens your credit history, both of which can negatively affect your score.”
He noted that the length of your credit history can account for approximately 15% of credit scoring models, so keeping older accounts open can benefit your overall profile. Another common misconception is that many people assume their salary directly impacts their credit score. “Your income doesn’t show up on your credit report, and it doesn’t directly affect your score. What matters is how you manage your credit compared to your income.”
Andrew Wayland shared practical tips for Brits looking to improve their credit scores, starting with registering on the electoral roll. “Start by registering on the electoral roll. It helps confirm your identity and address to lenders, and it only takes a few minutes to do.”
“Paying bills on time is another key factor, as payment history makes up a large portion of your credit score. Set up Direct Debits for your minimum payments to avoid missing them, even if you plan to pay more manually.”
He also recommended keeping credit utilisation below 30% of your available credit. “Using £300 of a £1,000 limit reflects better credit management than maxing out a £500 limit, even if you’re borrowing less in the second case.”
He advised spacing out credit applications by at least three months, as applying for too many credit products in a short period can signal financial trouble to lenders. “Each application causes a temporary dip in your score. If you make multiple applications in a short time, those dips add up.” For those with limited credit history, he recommended using specialised credit-building products. “Credit builder cards or small loans are designed to help build a credit history when used responsibly.”
Andrew Wayland from Drafty also suggested keeping old accounts open, even if you don’t use them often, as they help maintain your overall credit history. In 2021, the Financial Conduct Authority found that 14.2 million UK adults had low financial resilience, making it harder for them to cope with money problems and get affordable credit. However, Andrew Wayland emphasised that poor credit isn’t permanent. “The most damaging myth is that poor credit lasts forever. Most negative marks fall off your report after six years, and credit scores are constantly updated.”
“Improving your score is a gradual process. Consistent positive habits over time are more effective than looking for quick fixes.”
