What is a good credit score?

Lenders will check your credit score whenever you apply for credit, such as a personal loan, mortgage or credit card. It’s a way for them to find out if you’re a risky prospect or not when it comes to borrowing money.

But what is a good credit score, and how can you improve yours?

Lenders will check your credit score whenever you apply for credit, such as a personal loan, mortgage or credit card. It’s a way for them to find out if you’re a risky prospect or not when it comes to borrowing money.

But what is a good credit score, and how can you improve yours?

Anelda Knoesen
From the Money team
4
minute read
Do you know someone who could benefit from this article?
Posted 12 FEBRUARY 2021

What is a good credit score in the UK?

While we’d like to give you a specific figure that magically guarantees your approval for credit, it’s not as simple as that. That’s because the three main credit reference agencies in the UK all score differently, based on past financial behaviour.

  • Experian has a credit score range of 0 to 999. A good credit score is considered anything between 881 and 960, while an excellent rating is 961 to 999. It also maps the average credit score for almost 400 areas of the UK so you can see how you compare with people in your region.
  • Equifax has a credit score chart of 0 to 1,000. A score of 531 to 670 is good, 671-810 is very good, while a score of 811 to 1,000 is excellent.
  • TransUnion has a credit rating scale of 0 to 710. A credit score of 604 to 627 is good, while a score of 628 to 710 is considered excellent.

You can check your credit score for free by registering with any of the three credit rating agencies. For a fee, you can also request a more detailed report.

What is a bad credit score in the UK?

If you have a bad credit score rating, you’re more likely to be charged high interest rates or not even qualify for credit at all. 

  • Experian A poor credit score is anything below 720.
  • Equifax A score of 439 to 530 is poor, while a score of 0 to 438 is very poor.
  • TransUnion A credit score of 551 to 565 is poor, while a score of 0 to 550 is considered very poor.

Credit score ratings are accurate as of 26 July 2021.

Why is having a good credit score so important?

Having a good credit score matters because it helps lenders decide if they should approve your application for credit.

If you have a blemish-free credit record, you’ll have access to a greater choice of financial products and could benefit from low interest rates on loans, mortgages and credit cards. This can make it much easier to manage your debts.

If you have a bad credit score, however, you may still be approved for credit, but your choices will be limited and you’re likely to be charged higher interest rates. If your record is littered with unpaid debt or you have a County Court Judgment (CCJ), you could be turned down for credit altogether.

What affects your credit score?

Credit reference agencies calculate your credit score based on several factors, including:

  • Your payment history – if you’re late with a payment or miss one altogether, it will be marked on your credit file. This can lower your score for up to six years.
  • Applications for credit – every time you apply for credit, a hard search will be carried out on your credit report. This leaves a mark on your file. If you make lots of applications in a short space of time, it will have a negative impact on your score.
  • Length of credit history – lenders like to see a long track record of stability, with at least one of your credit accounts being held for several years. This shows you’ve been trusted by another lender for a long time. Having no credit history at all can give you a low score even if you’re responsible with money, because lenders don’t have any concrete evidence of your creditworthiness.
  • Past debts and bankruptcies – lenders will be less willing to let you borrow money if you’re declared bankrupt, you enter into an Individual Voluntary Arrangement (IVA) or you have a CCJ against you.
  • Your financial associates – the credit history of someone you have a joint bank account, mortgage or loan with can impact your own credit score.

How to get a good credit score

If your rating isn’t as high as you’d like, the good news is there’s a number of ways you can improve your credit score to boost your chances of success with potential lenders.

✓ Check and correct any mistakes on your report, such as incorrect names, addresses and credit applications.

✓ Spring clean your finances and make sure all your monthly bills are paid on time. You can do this by setting up Direct Debits. This way, you’ll avoid any bad marks for late payments.

✓ Make sure you’re registered on the electoral roll as lenders use this to confirm your identity and where you live.

✓ Close old accounts – having fewer lines of credit open looks better to lenders, as long as the ones you keep are well-managed.

✓ Don’t apply for too much credit in a short space of time. You can find out the credit cards you’re most likely to be accepted for by using our eligibility checker without it harming your credit score.

✓ Don’t use too much of the credit available to you. Keeping your credit utilisation ratio low may be helpful if you want to apply for a mortgage or a loan.

✓ Always try to make a repayment, even if it’s late. Defaulting on your debt will have a bigger impact on your score than missing the deadline by a few days.

✓ Consider a credit builder card if you have poor or no credit history so you can slowly build up your credit score. As with any credit card, it’s important to pay off what you owe in full each month.

Find out more about building your credit score.

Compare loans quickly and easily

Compare loans now

Find a loan
Compare loans quickly and easily Find a loan