Big changes to stamp duty – what it means for your credit score

Let's talk about the elephant in the room: those stamp duty changes heading our way in April 2025. If you're planning to buy a property, you'll want to know how they could affect not just your wallet, but the potential knock-on effects on your credit score too. Here’s everything you need to know. 

What's actually changing? 

In a nutshell, the government is lowering the stamp duty tax-free threshold from £250,000 to £125,000. Even if you're a first-time buyer, you'll still be affected, with your special relief threshold dropping from £425,000 to £300,000. 

What does this mean in real terms? Well, let's say you're selling your house and buying a new one for £295,000. Under the current rules, you'd pay £2,250 in stamp duty. But from April 2025, that same purchase will set you back £4,750 – that's an extra £2,500 you'll need to find.  

What's this got to do with your credit score? 

While paying stamp duty won't directly impact your credit score, the ripple effects might have a negative influence on your credit report. Here's how: 

Your credit cards could feel the pinch 

Finding an extra few thousand pounds isn't easy. You may be tempted to reach for your credit cards to help cover the cost of everyday essentials. But keep in mind that using more of your available credit will affect your credit utilisation – something which can impact your credit score and the outcome of lending applications. 

 This is one of those numbers that credit reference agencies keep a close eye on, and it’s beneficial to keep it around 30% to avoid appearing too reliant on borrowing – which could affect your credit score and the success of future applications. 

Borrowing more than you planned 

You might consider taking out a bigger mortgage to cover the extra stamp duty costs. But remember, lenders look at your debt-to-income ratio when deciding whether to give you a mortgage. It’s a good idea to speak with a mortgage broker or financial adviser to get a clear view of your options and what’s best for your situation. 

Keeping your credit score in shape 

Don't let these stamp duty changes catch you off guard. Here's how to protect your credit health: 

Get credit-smart now 

Take a good look at your credit report before the changes kick in. Think of it like a financial MOT – better to spot any potential issues now than when you're in the middle of a mortgage application. Make sure everything looks right, and if it doesn't, take steps to get things sorted. 

Know where you stand today with Checkmyfile – the most detailed credit report you can get. With all your information from the three main UK credit reference agencies in one place, you get absolute clarity where it matters most, with support when you need it. Get started with a 30-day free trial, then it’s just £14.99 a month. Cancel online anytime. 

Play it cool with credit 

Remember it can be beneficial to keep your credit utilisation around 30%. It’s important to weigh up the pros and cons of taking on more credit for your situation. Thinking about adding another card to your collection? We explore the different ways it could impact your credit health here. 

Build your safety net 

You might want to consider setting aside additional funds to prepare for potential stamp duty costs ahead of time. Some people treat it like a savings goal to reduce the need for borrowing later. 

The bottom line 

The 2025 stamp duty changes might feel like a bit of a curveball. But with some planning and credit-savvy moves,  you can avoid the knock-on effects. 

Remember that while a healthy credit score doesn’t guarantee you’ll get a mortgage, it can strengthen your application. You can find out more about who pays stamp duty, and when they can expect to pay it, in our article.