Why Your Credit Score Is Low and What You Can Do About It

If you’ve checked your credit report and discovered a low score, you’re not alone. Millions of people in the UK have poor or average credit, often without fully understanding why.

The good news is this:👉 A low credit score usually has clear reasons — and many of them can be fixed.

This guide explains the most common reasons why your credit score is low, how lenders view your credit history, and what steps you can take to improve it.

What Does a “Low” Credit Score Mean in the UK?

Credit scores vary depending on the credit reference agency, but generally:

• Experian: Poor = 0–560

• Equifax: Poor = 0–438

• TransUnion: Poor = 0–565

If your score falls into the “poor” or “fair” range, lenders may:

• Decline applications

• Offer lower limits

• Charge higher interest rates

Understanding why your score is low is the first step to changing it.

1. Missed or Late Payments

Why this matters

Payment history is one of the most important factors in your credit score.

Even:

• One missed payment

• A payment a few days late can negatively affect your score.

Common causes

• Forgotten direct debits

• Temporary financial difficulties

• Payment dates not aligning with payday

What you can do

• Set up direct debits

• Make at least the minimum payment on time

• Keep accounts up to date going forward

Late payments stay on your credit file for six years, but their impact reduces over time if your recent behaviour is good.

2. Defaults, CCJs, or Debt Problems

Why this matters

Serious negative markers significantly lower your credit score.

These include:

• Defaults

• County Court Judgments (CCJs)

• Individual Voluntary Arrangements (IVAs)

• Bankruptcy

Lenders see these as signs of higher risk.

What you can do

• Ensure all information is accurate

• Pay or settle debts where possible

• Focus on positive credit behaviour going forward

Even with past issues, credit rebuilding is possible.

3. Using Too Much of Your Available Credit

Why this matters

This is known as credit utilisation.

If you’re regularly using a high percentage of your available credit — especially over 50% — lenders may assume you’re financially stretched.

Example

• Credit limit: £2,000

• Balance: £1,800

This can hurt your score, even if you’ve never missed a payment.

What you can do

• Reduce balances gradually

• Keep utilisation below 30–40% where possible

4. Too Many Credit Applications

Why this matters

Every full application leaves a hard search on your credit file.

Multiple applications in a short period can:

• Lower your score temporarily

• Make lenders nervous

This often happens when people are repeatedly declined and keep applying elsewhere.

What you can do

• Avoid unnecessary applications

• Use eligibility or soft-check tools

• Space applications out over time

5. Limited or No Credit History

Why this matters

If lenders can’t see how you manage credit, they can’t assess risk properly.

This affects:

• Young adults

• People who avoid credit completely

• Those returning to the UK

Having no credit history can be almost as limiting as having bad credit.

What you can do

• Build a small, manageable credit history

• Keep accounts open and well-managed

6. Not Being on the Electoral Roll

Why this matters

Being registered on the electoral roll helps lenders verify your identity and address.

If you’re not registered:

• Your score may be lower

• Applications may fail automatic checks

What you can do

• Register at your current address

• Update details if you move

This is one of the easiest ways to boost your credit profile.

7. Errors on Your Credit Report

Why this matters

Mistakes on credit files are more common than many people realise.

Examples include:

• Incorrect balances

• Accounts that don’t belong to you

• Debts marked as unpaid when they were settled

What you can do

• Check your credit report regularly

• Dispute any incorrect information

• Provide evidence where needed

Fixing errors can sometimes lead to quick improvements.

8. Old Accounts or Short Credit History

Why this matters

The length of your credit history affects your score.

Closing old accounts:

• Shortens your credit history

• Reduces available credit

What you can do

• Keep older, well-managed accounts open

• Avoid closing credit unnecessarily

Why a Low Credit Score Isn’t the End

A low credit score:

• Does not mean you’ve failed

• Is not permanent

• Can improve with time and consistency

Lenders focus heavily on recent behaviour, not just past mistakes.

What to Do Next

Once you understand why your credit score is low, the next step is to create a plan.

That might include:

• Checking your credit report regularly

• Correcting errors

• Reducing balances

• Building positive credit history gradually

At UKCreditBuilder, we help you understand your credit position and take practical, realistic steps to improve it — even if you’ve been declined before.

Final Thoughts

Your credit score tells a story — but it’s not the whole story.

By understanding the reasons behind a low score and making steady improvements, you can move towards better financial options, lower interest rates, and more opportunities in the future.

Knowledge is the first step. Action is the next.