Lesson 1
The Fundamentals of Credit Scoring
Understand the core habits that lenders look for when calculating your reliability.
Payment History
Your payment history is the primary driver of your score. A single late payment can damage your record for years. Set up automatic minimum payments for every bill, even if you intend to pay the full balance later. This acts as a safety net if you forget a due date.
Utilisation Ratios
Lenders look at how much credit you use vs your limit. If you have a £2,000 limit, keep your balance under £600. High utilisation suggests you are over-leveraged, which lowers your score even if you pay on time. If you have multiple cards, spread your spending across them to keep individual utilisation low. Avoid maxing out one card, as this creates a negative signal even if the total debt across all cards remains the same.