Does council tax affect credit score?

Fallen behind on your council tax and worried it will impact the credit score you’ve worked hard to build up?

No need to panic. 

Council tax payments aren’t typically included in your credit report as a record of your financial history. However, it’s still worth understanding what happens if you miss a payment and why demonstrating positive financial habits is so important.

Let’s explore how council tax payments may influence your credit report and how a SIM-only contract phone with no credit check can help you boost your score more than you might think.

What is council tax?

Council tax is a tax collected by local authorities on domestic properties. 

Most people are required to pay it unless exempt - for example, if you’re under 18 years of age, caring for someone with a disability, or have a severe mental impairment. 

The amount you pay depends on several factors, including your home’s valuation band (based on its estimated value on 1st April 1991), your personal circumstances, the current value of your home, and the funding requirements of your council.

The payments are used to fund services such as libraries, education, transport services, recreation projects, and emergency services. 

The relationship between council tax and your credit report

Paying your council tax won’t affect your credit score. 

Both on-time and missed payments, won’t show up on your credit file, allowing you to maintain your current credit score. 

However, making regular council tax payments, and managing your money helps you build strong budgeting habits. These habits can make it easier to manage future repayments for things like mortgages, credit cards and other financial products.

What happens to my credit score if I miss a council tax payment?

While council tax payments don’t necessarily show up on our report, missed payments can still have serious consequences. 

If you miss a payment, you’ll receive a reminder notice after two weeks. Paying this within 7 days will keep you in good standing. However, if you don’t pay within that period, you’ll receive a final notice requiring the full annual amount to be paid upfront within another 7 days.

If you miss this, it’s likely that the council may seek a court’s permission to recover the debt through a ‘liability order’. 

How to establish positive credit behaviours 

Paying council tax is a great step in establishing a good relationship with credit. 

Budgeting your income to ensure you can make the payment on time, and in full lays a solid foundation for future financial commitments. 

Other ways you can improve your relationship with credit are: 

Keep credit utilisation low 

A lower percentage of credit use is seen as a responsible sign of responsible money management to CRAs and banks. Aim to use less than 30% of your credit limit, paying back bills consistently using direct debits.

Check your credit report regularly 

If you don’t understand how your credit report works, how are you meant to know how to improve it?

Review your report regularly, update any new information (including addresses and phone numbers), and report any errors you find. 

Get a credit-boosting SIM plan

A credit-boosting SIM plan gives you a way to demonstrate your ability to make regular payments and demonstrate them to CRAs.

Thankfully at Boshhh Mobile, all of our SIM plans are designed to boost your credit score with each monthly payment you make. 

Acceptance is guaranteed regardless of your credit history and score. 

With your first two months also being totally free, a brighter financial future starts with Boshhh. 

Fun fact: You can monitor your credit history and access credit building tips via the Boshhh Mobile app (available for iOS and Android).