Credit Score Mythbuster: How Do Other People Really Affect Your Credit Score?

Building an excellent credit score takes a lot of time, and there’s no doubt about it, can be hard work. When you’re doing all the right things and not seeing the progress you think is due, it’s natural to look for other things to blame. Like other people. If your credit score isn’t as high as you think it should be, it has to be because someone else’s actions are rubbing off on you, right?

Probably not.

But, before we get stuck in, let’s recap on what information you can expect to see in your credit report, and what this means for your credit score.

What information is in your credit report?

The vast majority of the information in your credit report is about you, and you alone. This means your personal address history and electoral registration info, and the details of accounts that you are named on, and this is the information that your credit score is calculated on.

The only exception to this is if you share joint accounts with somebody else. Then, you will see their name appear as a “financial association” or connection to you. We’ll talk about financial associates a little more next.

Financial associates

Can they impact your credit score? No.

Can they affect your ability to get credit? Yes.

Let us explain.

As we’ve already mentioned, a financial associate is somebody that you’re linked to, financially.  The financial link is important. Just living with someone isn’t enough to create a financial association between you. You have to share a financial account, which it being registered in both or all of your names. If you’re not the registered holder of an account, it isn’t making you a financial associate of someone else.

These are a few examples of accounts that you can become financially associated with someone through:

• Joint bank current accounts
• Credit card accounts held jointly, or with one of you as a “second cardholder”
• Loans you’ve applied for jointly
• Mortgages that you’re both named on
• Utilities accounts like electricity and gas, on which you are both named

You cannot become financially associated with someone through accounts that aren’t included in your credit report, like:

• Council tax bills
• Car tax
• Subscriptions like Spotify, Amazon or Netflix accounts
• Savings accounts
• Insurance policies that you pay for in one lump sum

When you become financially associated with somebody, you’ll see their name appear on your credit report under a section labelled “Financial associates”. In CredAbility, we call it “Connections and other names” since if you’ve ever gone by another name – a maiden name, perhaps – you’ll see that there, too.

Beyond their names, no other information about your financial associates appears in your credit report. So, you shouldn’t see accounts that your financial associates hold without you, searches that have been carried out on them, or anything else.

How do financial associates affect your credit score?

They don’t! Because your credit score is calculated based on the information that’s held within your credit report, then this means that no matter how brilliant or terrible your financial associates’ financial situations are, they will not affect your own credit score.

But remember, your financial associates can still impact your ability to get credit. When you apply for credit, lenders have a look at your credit report. Your credit report includes the name(s) of your financial associate(s), so lenders check out their credit histories, too. They do this to check how likely it looks that your financial associates might leave you in the lurch to cover the full cost of your joint commitments, not just your share. If your financial associate has high amounts of individual debt and a history of missing their payments, then a lender might consider it pretty likely that you’d have to cover their share of your joint financial obligations. They might also wonder if you have, or would ever, step in to pay their individual debts, and what this would mean for your ability to afford your own commitments. If a lender thinks that you couldn’t afford to cover your financial associate, keep up with your existing commitments and pay what you owe to them, they may decline your application.

So, it’s worth being sure about who you get into financial bed with!

Other people you live with

Can they impact your credit score? No.

Can they affect your ability to get credit? Also no.

If you live with people and you don’t share any bank, credit or utilities accounts with them, then it’s extremely unlikely that you’re financially associated with them. And, as we’ve learned already, even being financially associated with someone doesn’t affect your own personal credit score, it just means that their circumstances will be taken into account when you apply for credit, as well as your own.

But, we all know that household finances aren’t as clear cut as only paying for the accounts your name is on. Many of us will be chipping in towards bills held in someone else’s name or accepting contributions towards bills that we manage. So, even though a lender’s decision on your application won’t be influenced by other people you live with, we think that your housemates, partner or family, and in particular the accounts or costs you unofficially share with them and may one day need to pay for, should influence your decision to apply for credit or not. Lenders will do their best to make sure you can afford to repay anything that you borrow, but as borrowers, we all have a responsibility to make sure we can afford to repay all our loans, credit cards and other new credit we take out, too.

People who lived at your address before you

Can they impact your credit score? No.

Can they affect your ability to get credit? Still no.

In a recent CredAbility quiz, 60% of people believed that if someone who lived at your address before you had run up debts, it would affect your credit score. But, this isn’t true. Remember, your credit score is calculated based on the information that’s in your credit report. And your credit report only includes information about you and your accounts. It simply isn’t possible for people who lived at your address before you to affect your credit score.

“But what about the credit blacklist?!” we hear you cry. As widespread as reports of the blacklist are, we can confirm that it is a myth: the credit blacklist does not exist. And when you think about it properly, that makes total sense. A system that’s set up to penalise you based on the actions of somebody you may not even know, just because they lived at your address sometime before you did, would be deeply unfair. There’d be swathes of angry people out with their pitchforks and torches to hunt down the bad debtors scuppering their chances of getting a new credit card. There might even be riots in the streets! So, that’s simply not how it’s set up.

When the system can go wrong

Credit reports are put together by credit reference agencies, who use computer systems to sort through the enormous amount of information they collect about everyone and file it according to who they believe it belongs to. Like all computer systems – and people, for that matter – sometimes they don’t quite get it spot on.

Cases of the system not working are unusual but do occasionally happen. The most common situation where things can go wrong is if you have extremely similar details to somebody else, and the system can’t tell you apart. For example, perhaps you were named after your father who you still live with, so you share a name and address, yet aren’t the same person. Or, perhaps there’s another person out there who has your name and date of birth, but a different address history. Or, in the ultimate weird coincidence, perhaps somebody who lived at your address before you shares your name and date of birth, and because they used to live in your house, also shares a chunk of your address history! If we had to put a rule around it, we’d say any situation where your details are similar enough to somebody else’s that you’d think “wow, that’s a freaky coincidence” could be enough to confuse the computer systems that are organising your credit report, lead to you seeing accounts and information that don’t belong to you and, of course, affect your credit score.

Thankfully, when you spot that something isn’t right and you think the system might be mistaking you for someone else, it’s easy to get it fixed. All you need to do is flag the issue with the credit reference agency powering your credit report (with CredAbility, that’s Equifax), and they’ll investigate for you. You can find out more about how this works in our guide to fixing mistakes in your credit report.