Households with poor credit scores pay £1,300 a year more for utility bills and loans than families with higher scores, according to new research.
They could be paying £1,170 more a year for bills including mobile phone, and loan repayments for white goods and cars and £138 more for gas, electricity and water, the research by Cranfield Business School for Aqua credit cards has found.
The credit card provider also found that more than 80% of people don't realise a low credit rating could result in bigger bills and 57% of UK adults are at risk of being declined credit by mainstream lenders.
Mario Lupori from Aqua explained: "UK families are paying £327 million a year extra on their energy bills as the result of poor credit ratings. This means the average family with a poor credit rating could be spending 12% more than the average family with a good credit score."
He added: "The good news is there are lots of manageable steps people can take to improve their credit rating, such as registering on the electoral roll, paying bills on time or simply correcting mistakes on their credit report."
Other tips from Aqua include: