Can buying or trading crypto affect my credit score?

Investing in cryptocurrencies (or crypto) has definitely made some people very rich. But just as many have lost fortunes too. Investing is always risky. The ups and downs of crypto’s value means your investment can boom or bust from one week to the next! But how does crypto affect credit scores? Loqbox unravels the mystery.



What is crypto?

If you’re not already aware of cryptocurrencies, they can seem pretty complicated. Simply put, crypto is a digital currency that’s not controlled by one person or authority (or “decentralised). It’s unlike the pounds in your pocket, which  are known as a fiat currency, issued by the government, and not backed by any commodity (like gold).

Fiat currencies give the governments that issue them more control over the economy (or economies) that use that currency.Crypto is different because it’s secured by something called blockchain technology. Blockchain keeps a public ledger of all transactions (blocks) that simultaneously connect (chain) to a massive network of computers, rather than at a central bank.

Love it or loathe it, it’s clever stuff. Crypto is mined and recorded using very complicated and powerful computing. But it is also becoming more and more popular. It’s possible for anybody to jump on the crypto bandwagon. Currencies like Bitcoin, Ethereum, and Tether are some of the biggest. But there are tens of thousands of versions.

Cryptocurrencies’ values are notoriously volatile. They can fluctuate wildly in short spaces of time. But they’re still considered by many to be solid and secure investment options. Just like many investments, buying and trading in cryptocurrencies can be very risky, but if you’re considering jumping into crypto, you might be wondering what effect it has on your credit score.




What are credit scores?

Before we get into how crypto affects your credit scores, it’s a good idea to understand why you should care! Your credit scores (yes plural, you actually have three!) are numerical values which summarise your credit reports. These credit reports are held by each of the top three credit reference agencies (CRAs) in the UK: Experian, Equifax and TransUnion.

When you apply for credit cards, personal loans and mortgages, the lenders will do a credit check on you. They can see how much of a risk you will be to lend to by looking at your credit history and how you’ve managed borrowing in the past. Your credit score is just for your use, and shows you how likely your application will be accepted.

Generally speaking, the higher your credit score, the more likely you’ll be successful with credit applications and the better interest rates you’ll get. Better interest rates can save you thousands in the long-term so it’s worth making sure that your credit score is as strong as possible! 

If you’re not sure of your credit score you can actually check it yourself, for free and without hurting it, using one of these great services:

ClearScore (uses Equifax data)*
Credit Club (uses Experian data)
Intuit Credit Karma (uses TransUnion data)


*If you decide to sign up for ClearScore after clicking on this link we get a small commission.




Does crypto affect your credit scores?

Not directly, no. None of your bank accounts, savings or investments are recorded on your credit history. They aren’t considered credit so they don’t show up on your credit report and aren’t visible to lenders when they do a check on you.

However, it’s worth mentioning that while crypto doesn’t directly impact your credit score, that’s also true whether your investments are successful or not. So if you make a lot of money out of your investments it won’t push your credit score up either. Your income, salary and overall worth are also not recorded on your credit report. What your credit score will reflect is any credit you may have taken to pay for your cryptocurrency investments, and your repayments on that.




Does buying crypto affect your credit scores?

No. Buying crypto will generally not show on your credit history. However, if you buy cryptocurrencies with borrowed money you could find yourself in real difficulty if your investment is unsuccessful. 

It’s possible to buy crypto on a credit card (we definitely don’t recommend this!). If your borrowed investment doesn’t make a return, you’ll still owe the money you’ve lost. You could soon struggle to repay debts. This will eventually start to negatively affect your credit score.




Does trading crypto affect your credit scores?

No, not directly. Your investments, along with your income, bank accounts and savings, are not recorded on your credit report. Your trading activity with crypto will not be visible to any lenders if they do a hard credit check on you. But it’s not as simple as that.

Like all investments, crypto can be volatile and risky. You can make lots of money one week and lose it all the next. If your investments go badly you could find that you’re unable to pay your rent, mortgage or bills. This can have a very negative impact on your credit score. Read more about how missed payments affect credit scores here. 




How to build your credit scores?

If you’re thinking about investing in crypto and want to make sure your credit score is as healthy as possible before you start, you’ll be looking for a fast and proven way to boost your credit score. Good news! We have the answer. Get started with Loqbox Grow.

You can grow your credit score quickly just by making your weekly £2.50 per month membership  payments on a 0% interest credit account. We’ll report all of your responsible activity to the three CRAs (Experian, Equifax and TransUnion) to help give your credit score a blast off!

Improvements to your credit score are not guaranteed.

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Sign up for our monthly emails and we’ll do our best to help you find your way on your journey with money
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Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
Get started
Improvements to your credit score are not guaranteed