Credit Score Myths

By: Jennifer Lowe - Updated: 15 Sep 2025 | *Discuss

 

Personal debt in the UK has reached record levels, making borrowing a part of everyday life for many households. That’s why understanding your credit rating is so important. It can determine whether you’re approved for a loan, credit card, mortgage—or turned down. Your credit rating reflects your financial history, which is stored in a report held by credit reference agencies.

This report includes details of previous credit agreements such as loans, mortgages, and credit cards, along with your repayment history. It also records whether you’ve missed payments, carry outstanding debts, or have ever declared bankruptcy.

Lenders use this information, combined with your application form, to calculate a credit score. This score represents the risk you pose as a borrower. The higher your score, the lower the risk, and the more likely you are to access the best deals. Here are some of the most common myths about credit reports:

The Previous Residents Had Bad Credit and it Has Affected Me

Many people think the financial history of a property’s previous occupants impacts their own credit score. It doesn’t. Credit ratings are tied to individuals, not addresses. Your credit history is yours alone.

Other People in My Household Can Harm My Credit Rating

In the past, lenders could consider the financial history of family members under the same roof. Today, the only way someone else can affect your credit rating is if you share a financial link—such as a joint mortgage, bank account, or loan.

The Credit Reference Agency Turned Me Down for Credit

Credit reference agencies do not decide whether you are approved for credit. They simply collect and store your financial data. Lenders calculate your score and make the lending decision based on this data and your application details.

I Can't Get Credit Because I'm Blacklisted

There is no such thing as a universal “credit blacklist.” A poor credit history may make borrowing more expensive, with higher interest rates, or mean fewer lenders are willing to offer you terms—but it does not exclude you completely.

Your Credit Rating is Only Calculated Once

Your credit score isn’t fixed. Every time you apply for credit, lenders assess your current situation using your financial history and application. Each lender uses its own criteria, so your score can vary and is constantly changing.

Credit scores don’t just affect personal borrowing—they also impact businesses. If you run a company, your business credit score can directly influence what energy contracts you can access. To learn more, read How Credit Scores Can Affect Securing a Business Energy Contract on the Purely Energy website.

Title:

Miss Ms Mrs Mr Dr Rev'd Prof. Other

(never shown)

! Enter a Title

Firstname:

(never shown)

! Enter a Firstname

Surname:

(never shown)

! Enter a Surname

Email:

(never shown)

! Enter a Valid Email Address

Nickname:

(shown)

! Enter a Nickname

Comment:

! Enter a Comment

Validate:

Enter word:

! Validation Incorrect