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What affects your credit score – and should you pay much attention?
Credit scores can fluctuate, so here are some tips about keeping your score in good shape
March 23, 2026
Your credit score – or rating – is a tool used by lenders to help them determine whether you qualify for borrowing credit, such as a credit card, loan, or mortgage. The number you’re scored with gives them an indication of how you’ve managed debt in the past and how likely you are to stick to the agreed terms when it comes to paying back what’s owed. Many companies use it as a gauge to predict your future financial behaviours before you’re approved.
Having a good score is important as it indicates that you’re likely to be financially reliable, and likely to pay your bills on time. The higher your credit score, the better chance you have to be accepted for credit, at better rates. Lower credit scores, on the other hand, can have the opposite effect.
A good salary – while helpful – doesn’t always equate to a great credit score as income generally isn’t considered in scoring systems. There are lots of other factors that credit agencies do take into account when calculating your score, though. Read on for more information on some factors that could affect your credit score and what you can do to keep it high.
How to help improve your credit score
There are a number of factors that can affect your credit score. The following could help keep it in the high numbers, or help improve it:
- Register to vote at your current address, as it helps to verify your identity.
- Try not to use too much of your available credit limit – experts advise not to use more than 30% of your total credit limit.
- Make loan, mortgage or credit card repayments on time.
- Consider setting up regular payments to your credit card – paying off debt regularly looks good to lenders.
- Own a credit card that you pay off in full and on time, every month.
- Check your credit report often, and dispute any inaccuracies if you find them.
What can impact your credit score?
If you want to keep your credit score in good standing, you should be aware of the following, which could bring your rating down:
- Borrowing more than you can afford. Make sure you can meet at least the minimum repayments comfortably before taking out credit.
- Missing a card or loan payment – this one is serious, as it could be a black mark on your credit report for up to six years.
- Using all your available credit may indicate you’re having some financial trouble.
- Applying for a number of new credit accounts in a short space of time , including cards and loans, would indicate to a lender that you’re struggling financially.
- Not having a credit card. Lenders can’t decide if you’re a risk or not if you have no credit history for them to base their decision on. Making small, regular purchases on a credit card, then paying them off in full each month can be a good way to establish a positive score.
What else makes up your ‘financial fitness’?
There’s much more to your finances than the number on your credit score, with many other contributors making up your ‘financial fitness’. Take savings, for instance, which can give you some financial security by providing you with a fall back in case of any emergencies. Having this protection means you may not need to borrow money, for example, if (or when) that rainy day comes.
The other good news is that whatever you have in your savings accounts won’t make an appearance on your credit report. Applying for or opening a savings account, including making any deposits or withdrawals, won't make a difference to your credit score or alert potential lenders of your activity. Savings providers will usually only perform what’s known as a ‘soft search’ on your credit history to verify your identity.
What’s more, if you take out any credit, the support of some extra money in an emergency fund could help you ensure you make the monthly repayments on time – or save you from getting into debt entirely if an emergency arises. This is important when it comes to maintaining a decent credit score and avoiding any flaws on your credit report.
Does a good credit score really matter?
A good credit score is important, particularly if your finances have taken a hard knock and you’re looking to rebuild your credit. It’s also important if you’re planning on applying for credit – to take out a mortgage, for example.
Even if you’re pretty confident that your score won’t be impacted any time soon, bolstering your financial fitness with some savings in case of any future emergencies certainly won’t hurt. To find out how you can begin building up an emergency savings fund, read our online guide: Why do you need an emergency fund?
This article is for informational purposes only and is not a substitute for individualised professional advice. Articles on this website were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs International Bank, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. This article is not a product of Goldman Sachs Global Investment Research. The information contained in this article does not constitute a recommendation from any Goldman Sachs entity to the recipient, and Goldman Sachs is not providing any financial, economic, legal, investment, accounting, or tax advice through this article or to its recipient. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this article and any liability therefore (including in respect of direct, indirect, or consequential loss or damage) is expressly disclaimed.
| Savings interest rate (AER)(1) |
Savings Balance Before Paying Tax | |
| Basic rate taxpayer | Higher rate taxpayer |
|
|---|---|---|
| 1% | £100,000 | £50,000 |
| 2% | £50,000 | £25,000 |
| 3% | £33,333 | £16,667 |
| 4% | £25,000 | £12,500 |
| 5% | £20,000 | £10,000 |
The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.
