What's a bad credit score?

A credit score is something everyone has, which reflects your financial history and experience with credit and repayments. 

If your score is on the lower end of the scale, it can affect how likely you are to get approved for borrowing schemes - like mortgages, credit cards, and loans. 

In this blog, we’ll talk you through everything you need to know about life with a bad credit score, including the causes and effects, and how specialised options like bad credit phone contracts can help you!

What is a bad credit score?

Credit reference agencies differ slightly in their scoring system. With our partners at Equifax, your score will be rated as follows: 

• Poor - 300-579

• Fair - 580-699

• Good - 670-739

• Very good - 740-799

• Excellent - 800-850

What causes bad credit files?

Poor credit can happen to the best of us, but most people don’t realise they have a bad score until they go to apply for a loan, mortgage, or credit agreement. 

Here are the key things that can cause a dip in your credit score:

Little to no credit history 

Having minimal experience with credit can result in a low credit score. Lenders don’t want applicants who are hard work and inexperienced in the world of credit, so it’s more of a risk accepting those with no credit history. 

Missed or late payments 

If you do have experience borrowing money - in the form of credit, a mortgage, or a loan - but have missed payments or been late paying the full amount, it doesn’t put you on the best footing. Lenders see this as an example of you struggling to manage your funds. 

Credit applications 

When you apply for any form of credit, a hard search will be done on your credit use and history. However, too many hard searches in a short period can impact your score, as it looks like you’re too reliant on credit options.

The effects of a bad credit score

Refused credit 

Above all, you’re more likely to have your credit application refused if you have a bad credit score. To lenders, you’re seen as a risk if you have a low credit score, as it suggests you can’t make repayments in full or on time. 

Higher interest rates 

Those with low credit scores are often faced with higher interest rates on repayments, making matters much more expensive in the long run. 

Higher insurance premiums 

Having a lower credit score implies you’re less likely to make repayments on time, taking insurance premiums through the roof. 

Difficulty getting on the property ladder 

When it comes to renting and applying for a mortgage to buy a house, a hard search will be done on your credit score. If it’s too low, it’s unlikely you’ll be accepted or approved, as to lenders and landlords, it’s a bit of a risk if you’re unable to make full payments on time. 

Can I improve my credit score?

Of course!

Credit scores are fluid, and are likely to change throughout your life. 

Luckily, this means you can give it a boost when you’re having difficulty getting approved for loans or credit agreements. 

Here’s how: 

Keep up with your payments 

If you’ve taken out a loan, or are using credit, try not to let your payments slip. 

Set up standing orders to make sure the money goes out on time, allowing you to budget your funds for the rest of the month. 

Are you registered to vote?

Simple, but effective. 

If you’re not yet registered to vote, signing up with your current address helps to confirm your identity and location. 

Reduce credit searches 

As frequent hard credit checks can hinder your score, make sure to space out credit applications, and only apply for credit you’re likely to get. 

Ask the experts 

If you’re starting to feel a bit fed up about your low credit score, and are struggling to build it up any other way, it’s time to look into other methods. 

Here at Boshhh, we specialise in bad credit phone contracts, designed to help those with poor credit scores. Our SIM-only plans help to build your score over time, proving to lenders that you can make regular payments - all while taking advantage of the UK’s leading phone network. 

But this isn’t all. 

With our partners over at Equifax, you can view your credit score whenever you want! You’ll even get support and advice from the experts on how to boost your score further for ultimate financial freedom. 

Learn more with Boshhh

Looking to improve your credit report?

Boshhh is here to help. 

Our flexible SIM-only phone contracts offer nationwide coverage, with payment plans that allow you to achieve your financial goals. 

Learn more today, and when you’re ready, boost your credit with Boshhh - the clever mobile network.