Credit Score/Credit Rating

Credit score/credit rating

Credit score - also known as a credit rating, is a numerical expression used to show how you manage your finances as well as helping lenders make the big decision on whether or not to approve your credit card, loan, mortgage or any other finance and if you'll be able to pay it back. Lenders will use at least one credit reference agency to determine your application.

Credit agencies 

If you are living in the United Kingdom, there are two main credit referencing agencies that lenders use - Experian and Equifax. When you submit a credit application these agencies will gather all the information from your credit history. Including court records, electoral roll, anyone associated with your finances e.g. partner and all the addresses you are related to. 

What is my credit score/rating?

To check your credit score/rating you simply contact a credit agency with a few personal details. To view your credit report it is a small charge of around £2. However, this may give you an insight on why your score is either good or bad.

Every credit agency scores differently. A good score with Experian is 880 out of 999 and Equifax is 420 out of 700.

Please note: a credit application is not based purely on your credit score/credit rating. Every lender has their own lending policy and requirements.

Ways to improve your score

Prove where you live 

To prove where you live it is recommended to register on the electoral roll with your current address. This will show lenders you are who you say you are.

Payments are made on time 

Ensure all payments are made on time and in full each month. Failing to do so will effect your credit score and damage your chances of credit in the future. Anything between 3 - 6 miss-payments can lead to your account being defaulted. This can have serious consequences and will stay on your credit file for 6 years.

Joint accounts 

If you share a bank account with a friend, partner or family member and they have a poor credit score/rating, this may also effect your own score too.