Do blacklists exist? Should I have a joint account? The truth behind 10 credit myths

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Credit reports can determine whether or not a lender will give you a mortgage or a loan, yet public awareness about them remains stubbornly low.

Nearly half (49%) of UK adults have never accessed their credit report, with the figure dropping to 72% among those aged 18-24, according to a survey by Experian.

And of those who have checked their report, a fifth did so more than three years ago – despite consumers being able to potentially save hundreds of pounds if they improve their credit score.

The study also uncovered a serious lack of understanding about what affects credit scores, with 17% incorrectly thinking that checking your own report could have a negative impact.

As a result, Experian has taken the 10 biggest credit score myths and revealed the truth behind them (with the correct answers highlighted in bold).

Previous occupants of your address…

…don’t affect your credit score

It makes no difference if the previous occupant of a home was a millionaire or bankrupt. It is a common misconception that an individual is financially connected to someone they have lived with or who has lived at the same address. This is not automatically the case – they are only financially connected if you share things such as a joint account or have applied for joint credit. Lenders are only interested in the individual’s financial details, plus those of anyone they’re financially linked to.

Credit reference agencies…

…don’t make lending decisions

Credit reference agencies compile and hold credit reports securely. They don’t make decisions; that’s up to lenders who check the information in the report along with other information, such as details from their credit application. Most lenders will then use this information to calculate their own credit score, to help them to decide whether to offer credit.

Past missed payments…

…do count

County Court Judgments for non-payment of debts, Individual Voluntary Arrangements (IVAs) and bankruptcies stay on a credit report for at least six years. Even a missed repayment on something like a credit card is potentially recorded on your report for at least six years. Any of these could count against the individual as lenders may think that they will miss payments with them too.

If you’ve never borrowed before…

…you’re unlikely to get the best deals

 A credit history can be thought of as a ‘file’ demonstrating your financial track record. There are people in the UK who have ‘thick files’, those who have ‘thin files’, and some who do not have a file at all.  If someone has never borrowed, they will have thin files. This means lenders have no way of predicting how reliable they’ll be in the future and may even turn down an application. Most of them would rather see a credit report showing a few well-managed loans or cards and regular repayments.

You only have one credit score…


Each lender uses a unique method to calculate their own credit scores and some use a different formula for different products, such as loans and credit cards. Your personal Experian Credit Score is something only the individual can see and gives them an indication of how a lender may view them.

Credit blacklists…

…don’t exist

 Blacklists don’t exist. Some lenders do consider factors like repayment history and how much is already owed. They want to be sure that you aren’t taking on more credit than you can comfortably manage.

Friends and family living in your home…

…don’t affect your credit rating

Unless someone shares a financial connection with any of them – for example, a joint mortgage – friends and family have no impact on a credit report. Just living with someone doesn’t create a financial connection. If a person does have a financial connection with someone, lenders may look at their credit report as well when they apply for new credit, as their circumstances could affect the ability to make repayments.

It doesn’t matter how many credit accounts you have…


Lenders want to be sure that the individual can afford more credit. Using the limits of a large number of credit accounts can indicate they are reliant on credit.

Items in your credit history stay on your report forever…


A credit report is designed to give lenders a picture of an individual’s recent and current financial position – they’re unlikely to be concerned about a missed payment that occurred over a decade ago because it has no relevance on their likely behaviour today. Most information included in a credit history is therefore held for around six years.

Checking your credit report lowers your credit score…


Someone checking their credit report does not impact on their credit score.

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