What moves your credit score?

In plain words

Your payment record weighs most in widely used credit scores. Each on-time payment is a small step up; a missed one, once reported, is a big step down that stays on file for years.

Knowing this helps you see why one reported late payment can matter so much. Missing it can cause a big score drop that stays on file for years, even after many on-time payments.

Sofia hands in a loan form at a lender's desk to borrow money for a used car. The lender checks her credit score, which shows how reliably she has repaid in the past. Because she has missed several payments before, the lender turns her down.

Two worked examples

Score 650.

A year of on-time repayments nudges it up a little each month.

One payment 30 days late, once reported, can undo more than that whole year did.

Paying the loan off keeps its clean record on file — the score stays about the same.

Nigeria

Score 610 with a credit bureau.

Twelve on-time repayments on a ₦50k loan build a record of repaying.

One repayment 30 days late, once the lender reports it to the bureau, is a mark lenders weigh heavily.

Clearing the loan keeps that record on file.

The common mistake

Paying on time counts most in your score

The mistake: Thinking one late payment is minor because the others were on time — a reported miss outweighs many on-time payments.

What’s true: Lenders read your past as your future — one reported miss speaks louder than a year of on-time payments.

Credit utilisation

Credit utilisation is the share of your card limit that you are using. A card with plenty of unused room can signal control, while a maxed-out card can look like a strong need for cash. A common mix-up is thinking a higher limit hurts your score; it is the share of the limit in use that counts.

Lower use of the limit reads better; many guides use about 30% as a rough line.

£4,000 limit with a £1,600 balance = 40%.

At £400 (10%), the share in use reads as lower.

Nigeria

₦500k limit with ₦200k used = 40%.

At ₦50k it would be 10% of the limit in use.

Checking your own score never lowers it

Looking at your own report is a soft check: the score does not move. Applying for credit lets a lender run a hard check — a small dip that fades over months. Many applications close together add up. Reading your own file leaves no mark; asking a lender for credit does.

Knowing the difference helps you check your report without fear, while seeing why many credit applications close together can matter. Missing this can make several hard checks add up and cause a small dip in your score.

Sam fills in the form for a car loan, and the lender pulls up his credit file to decide. That check is a hard inquiry, and it goes on his file because he asked for credit. A few weeks later he applies for a phone contract, and the file is checked again.

Score 700.

You check your own report: still 700.

You apply for a new card: a hard check, and a newer average account age — a small dip, back within months of on-time payments.

Five applications in one month read as a hunt for credit.

You check your own credit report: a soft search, which lenders cannot see, and the score does not move.

You apply for a credit card: the lender's hard search stays on your file for 12 months and can lower the score a little for a while.

Several applications close together read as a hunt for credit.

Where you’ll meet it

Your money, or money you will owe?The checkout looks the same either way; what differs is whether the bill is already paid or still coming.
Minimums everywhere, surplus on oneSpreading surplus thinly feeds every debt's interest; focusing it actually closes one.
Fees turn small loans into big onesThe sticker rate is the advert; fees are the price — total cost is the only honest comparison.

TRAIN IT

Play it in your browser.

Three quick rounds in your browser. No sign-up, nothing to download.

Play 3 games free

Get the app

Education, not financial advice Source: Theorise lesson and coach text