What is a good credit score?

15th August 2018

By Kurt Wood

A good credit score can bring you a lot in life. It will help you get loans, mortgages and credit cards and can even influence your mobile phone contract, car insurance and rent. 

Credit score basics

Your credit score tells potential lenders and creditors how likely you are to make repayments and how high / low risk you are as a borrower. It’s one of the main things lenders take into account when deciding whether to offer you credit. 

Credit scores from the three major UK providers – Experian, Equifax and CallCredit - give a ranking of ‘poor’, ‘fair’, ‘good’ and ‘very good’. Aim for the top two categories for the best chance of getting a mortgage or loan. 

There are certain things in your credit report that are huge red flags to lenders, so avoid having outstanding balances, missed payments, bankruptcy proceedings and County Court Judgements (CCJs) if you want credit. 

How credit scores are worked out

Your credit score is worked out from your credit history. A credit check will look at theamount you’ve borrowed, your ability to repay on time, the number of loans or credits you have, and other things that could impact your ‘lendability’.   

Your score is reviewed regularly (usually every 30 days) by one of the three credit reference agencies in the UK:  

-Experian 

-Equifax 

-CallCredit 

Good vs. bad credit scores

Different credit reference agencies use different scoring systems. So a good score with one might not be a good score with another. 

Experian  

961 - 999 = excellent 

881 - 960 = good 

721 - 880 = fair 

561 - 720 = poor 

0 - 560 = very poor 

Equifax 

466 - 700 = excellent  

420 - 465 = good 

380 - 419 = fair 

280 - 379 = poor 

0 - 279 = very poor 

CallCredit 

CallCredit scores from 0 to 710, and also uses a rating from 1 to 5. 

5 = excellent  

4 = good 

3 = fair 

2 = poor 

1 = very poor  

The average credit score

As a rule of thumb, aim to be above average by borrowing responsibly and making repayments on time.  

Here are the current average scores for all three agencies:  

Experian – 700+  

Equifax – 380  

CallCredit – 611  

But remember that the average score isn’t necessarily a good one. 

How credit checks affect your credit score

When you apply for credit, the lender runs a credit check. This leaves a “footprint” on your file. 

These footprints stay on your file for three months, so try not to rack up the rejections. 

Checking your own credit doesn’t affect your credit score at all. 

If a lender wants to run a credit check, they’ll be able to view your score as well as other important information. Your credit file will show them:  

-Your name and date of birth  

-Current and previous addresses (confirmed by the electoral roll) 

-Open loan, credit card and mortgage accounts (and their balances)  

-Closed loan, credit card and mortgage accounts (in the last six years) 

-Applications and searches made in the last three months 

-Overdrafts with your bank 

-Missed payments  

-County court judgements (CCJs) or bankruptcies  

What to do if you have no credit history 

If you’ve never been responsible for paying your own bills you may have no credit history. There’s a big difference between ‘no credit history’ and ‘bad credit history’, but no credit history definitely won’t help your credit applications.  

If you have little or no history, it’s time to start building some. Taking out a credit card and using it responsibly is a great way to boost your score. Credit builder cards are ideal for this. As long as you pay off your balances on time, they can do great things for your credit rating.  

How to check your credit score online

If you want to find out whether you have a good credit score, you can check online via one of the three credit reference agencies in the UK.  

Experian 

The Experian website offers unlimited access to your credit score for free. With the paid version, you get personalised tips, a full credit report and anti-fraud web monitoring. You can also buy a one-off “statutory report”, which shows you what a lender would see if they carried out a hard check.  

Equifax  

Sites such as ClearScore provide free credit score checking for Equifax. Or you can go direct to the Equifax website for a paid membership. This gives you unlimited access, reporting, alerts and protection against online fraud.  

CallCredit 

CallCredit offers free credit reports for life. You can also pay to get more detailed reporting.  

We offer basic CallCredit reporting through our free credit report

Ways to improve your credit score 

You can’t fix a bad credit score overnight, but there are a few things you can do that will make a difference quickly: 

-Register on the electoral roll  

-Pay bills on time  

-Pay down existing balances  

-Consolidate your debts  

-Use credit cards responsibly

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