Tax Glossary

Credit Score

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Last updated on:
March 17, 2024

Your credit record, or credit score, is a crucial financial indicator used by lenders to evaluate your creditworthiness. It encapsulates your financial history, including borrowing, credit usage, and bill payments. In the UK, this score is determined by credit reference agencies such as Callcredit, Equifax, and Experian.

How Your Credit Score is Used

Lenders reference your credit score when considering you for financial products like credit cards, mortgages, or financing agreements. A higher score not only increases your chances of approval but can also affect the interest rates offered. Beyond lending, your credit score can influence your eligibility for certain government benefits and is used in the enforcement of unpaid taxes.

Improving Your Credit Score

Improving your credit score is a process that requires time and diligence, particularly for the self-employed, who might face more challenges in securing loans or financial products. A poor credit score can limit your financial options, making it essential to adopt strategies to enhance it.

Tips for Boosting Your Credit Score:

  • Keep Financial Records Updated: Maintain up-to-date accounts, and consider using a certified accountant for filing your Self Assessment tax return. Accurate and timely financial documentation is key.
  • Preserve Financial Documents: Store all relevant financial documents, including tax returns and bank statements. These can be critical in proving your income and financial stability.
  • Obtain Your SA302 Form from HMRC: This document outlines your total income and tax due, serving as a valuable proof of earnings when applying for loans or credit.
  • File Tax Returns Early: Submitting your tax return early each year can demonstrate financial responsibility and organization.
  • Use Direct Debit for Bill Payments: Setting up direct debits for bill payments ensures timely payments and can help avoid late fees. Ensure you manage your finances to prevent overdrafts or missed payments.


A strong credit record is vital for financial flexibility and access to a range of financial products. For the self-employed, demonstrating financial stability and responsibility is even more critical, given the potential scrutiny from lenders. By following the outlined steps and consistently managing your finances, you can improve your credit score over time, opening up new financial opportunities and securing better terms for loans and credit.

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