The phrase ‘credit history’ is bandied about a lot these days. But while 70% of us know what a credit reference agency is, and 86% of know about credit scores*, fewer of us understand how our credit history is calculated.

Here’s our guide to the six things you probably didn’t know about how credit scores are worked out.

1. Payment history
Some 32% of your credit score comes from your payment history**. That includes how regularly and reliably you’ve paid back loans, made mortgage payments and paid utility or mobile phone bills, for example.

You can also use your rent to build your credit score. Find out how Credit Ladder can help.

2. Amount owed
Up to 23% of your credit score is about how much credit you have left. Which is why, if you’re going to use a credit card or loan facility, you shouldn’t regularly max it out. If you’re consistently living life at the credit limit, it can count against you.

3. Length of credit history
Credit reference agencies like to see that you can use credit over reasonably long periods, and ideally your different accounts or cards should be at least six months old to count.

4. In the mix
It’s a good idea to take out different types of credit – bank cards, store cards, home loans, revolving credit (like an overdraft) as well as those featuring instalments (like a home loan). This shows you can deal with the different demands of these credit types.

5. Credit crazy
Try to avoid applying for loans and cards frequently – if you do, and for whatever reason, it can make you look a bit desperate to get hold of credit all the time. Reference agencies are suspicious of this.

6. Get on the electoral roll
Credit agencies like to track where you live so they can verify who you are. They use the electoral roll to achieve this, so if you’re not on it, then you could be invisible to them and your score will be lower than it should be.

*Experian Research, November 2015.
**https://www.experian.com/connect/service-providers...

Remember, CreditLadder can help you improve your credit score.

CreditLadder can improve your credit position by reporting your rent payments. CreditLadder is the first way to improve your credit score and position across all three of the main Credit Reference Agencies in the UK, namely Experian, Equifax and TransUnion. Building up a high credit score has a lot of benefits, including helping you access finance at better rates - this can also help save you money. CreditLadder also runs a free mortgage application service in partnership with Tembo which will tell you how much you could borrow.

Remember the content provided in this article is for information purposes only and should not be considered as advice.