Our finances follow us throughout our lives, but it’s a topic that lots of people wish they knew more about. Understanding more about your finances helps point you in the right direction on your financial journey. One of the often misunderstood parts of that is your credit score.

Your credit score is what lenders use to get an idea of how reliable you are when it comes to borrowing money.

The three main credit reference agencies, TransUnion, Equifax and Experian, all calculate credit scores in slightly different ways. This can mean there is often confusion about what can affect your credit scoreopens in a new tab. In this blog, we’ll debunk some of the common myths to help you understand how it all works.

Does income affect your credit score?

Neither your income / salary, nor your job / job title are part of your credit report and don’t affect your credit score. Being in a high-paid job or a certain sector doesn’t automatically mean you have a positive relationship with credit.

Your credit score is based on:

• How do you borrow money?
• How reliable are you at repaying?

Your income may be checked separately when a lender decides how much you can afford to repay. This is called an affordability check and is different from your credit score.

Does Universal Credit affect your credit score?

Benefits like Universal Credit do not appear on your credit report and do not directly affect your credit score. However, when applying for credit, lenders will also do an affordability check to see how much you can comfortably borrow, which is where universal credit may have an impact.

Does a credit card eligibility check affect your credit score?

Most eligibility check tools use a soft search, which does not affect your score and cannot be seen by lenders.

It’s a good idea to research credit products and compare credit cards to ensure you find the right product for you, and doing so will not impact your credit score until a ‘hard search’ occurs.

A hard search only happens if you go ahead and apply. A soft search eligibility tool, such as QuickCheckopens in a new tab, will give you a straight yes or no answer on your credit card eligibility without impacting your credit score, so you can apply with confidence.

Does my partner’s credit score affect mine?

Whether you’re married, in a relationship, or simply living with somebody, it doesn’t mean that your credit scores are linked, and so the other person's score won’t impact yours.

Your credit score is your own. Sharing the same home or last name does not link your credit scores.

You only become linked to someone if you share a financial product, such as:

• A joint bank account
• A joint loan
• A joint mortgage

When this happens, lenders may look at the other person’s credit history when you apply for credit.

Does your address affect your credit score?

Credit scores are linked to people and not to homes, neighbourhoods or towns/cities. Where you live does not affect your score.

The financial history of a person is not attached to their address, and that means that the previous occupants of your house also cannot affect your credit score.

Your address is used to confirm who you are and prevent fraud.

Does checking your credit score affect it?

Checking your own credit score does not affect your score, and regular checks are encouraged to stay up to date with your credit situation.

When you look at your credit score, it creates what is called a soft search. Soft searches do not affect your score and cannot be seen by lenders.

It’s a good idea to check your credit score often to:

• Understand what affects it
• Spot any mistakes

This is different from a hard search, which happens when you apply for credit. Hard searches are recorded and can affect your score for a short time. You can check your credit score and report with confidence and without impact using our CreditWiseopens in a new tab tool.

Does my student loan affect my credit score?

No, your student loan does not directly impact your credit score positively or negatively.

According to gov.ukopens in a new tab: “Student loans are different from other types of borrowing because they do not appear on your credit file”.

The confusion with student loans likely stems from the word loan. While a regular loan does impact your credit score, a student loan does not. Student loans are repaid through the payroll tax system rather than tracked through a credit reference agency.

Does the car I drive affect my credit score?

Similar to income, the car you drive won’t have an immediate impact on your credit score. While the type of car you drive can impact how much your insurance might cost, it won’t impact your credit score.

Where your car, or anything you own, will play a factor in your credit score is anything that involves paying off a sum over time, such as:

• Monthly finance payments
• Car insurance payments (when paid monthly)

It is important to stay on top of your monthly payments, as late payments can negatively affect your credit score.

Is there such a thing as a credit blacklist?

There is no credit blacklist. A common misconception is that you can be blacklisted from gaining more credit if you make mistakes, such as late payments. This is not the case.

People are not banned from borrowing because of one mistake. Each lender looks at your own credit history and decides for themselves based on their own criteria.

If you have missed payments or defaulted before, it may:

• Limit the credit you can get
• Mean higher interest rates

But it does not mean you are “blacklisted”.

Do parking fines affect credit score?

Not usually. Parking fines or similar fines will likely only affect your credit score if they are not paid and turn into a court judgment (such as a CCJ).

If that happens, the CCJ will appear on your credit report.

The key to a healthy credit score is focusing on what can impact it and building good habits over time

If your credit score isn’t where you want it to be, the best thing you can do is learn more about what can affect it, so you can focus your efforts on the right areas and build good habits over time. Small, steady improvements can make a big difference.

A lower score doesn’t mean things can’t improve. Using a credit card for bad creditopens in a new tab responsibly, like the Capital One UK Classic Card with a 34.9% APR Representative Variable, could help you rebuild your score over time by:

• Spending small amounts
• Paying back on time

Not doing so could harm your score. You can check if you're eligible without affecting your score by using our QuickCheckopens in a new tab tool.

Find out more about your credit score

This blog is designed to act as a helpful starting point for understanding your credit score. Follow the links to find out more:

• How to build your credit score with a credit cardopens in a new tab - Understand how you can use a credit card to improve your credit score
• What can affect your credit scoreopens in a new tab - Stay on top of what could impact your score
• Credit scores explainedopens in a new tab - Your guide to your credit score
• For the latest information on credit scores and reports from the UK's three main Credit Reference Agencies, check out these guides provided by Experianopens in a new tab, TransUnionopens in a new tab and Equifaxopens in a new tab.