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What Is a Good Credit Score in the UK?

Written by, Marija Petkova

Updated May, 3, 2022

Good credit scores unlock various financial benefits, such as easier access to loans, better credit card rates or mortgage terms, and more.

To learn what is a good credit score in the UK and how to improve it quickly, read our brief yet informative guide below.

Let’s swipe in!

What Is a Good Credit Score?

Your credit score, or rating, is a three-or four-digit number indicative of your trustworthiness as a money borrower as it reveals information about your past financial dealings, such as your success in paying off your debts on time.

While a higher credit score boosts your chances of securing different types of loans at better terms, for example – buying a car, a lower credit rating may prevent you from applying successfully for certain financial products due to the risk of timely repayment.

In the UK, Equifax, Experian, and TransUnion are the main agencies in charge of producing your credit score. However, since these organisations use different credit rating systems and loan information, your credit rating may vary depending on who issues it.

The fair, good, and excellent credit score range values of all three agencies are listed below:

ExperianTransUnionEquifax
Fair721–880566–603380–419
Good881–960604–627420–465
Excellent961–999628–710466–700

Note: While your credit score is unavailable to the public, certain types of organisations may be able to access it with a court order, such as banks, creditors, utility companies, and more.

How Are Credit Score Numbers Calculated?

All major credit rating institutions use the same criteria and financial data offered by lenders and other finance-related businesses when issuing your credit report and calculating your credit score. Essentially, your financial history impacts your credit rating via several factors:

  • Credit history—whether or not you paid off any loans, credit cards, overdrafts, mortgages, phone contracts, vehicle finance on time.
  • Credit applications—review of the number of different loan applications you have submitted throughout the years, including rejected ones.
  • Public financial records—whether or not you were issued any court judgements or filed for bankruptcy or other types of insolvency.
  • Financial ties—whether or not you have applied for joint credit products with other individuals/businesses.
  • Fraudulent activity—whether or not your credit card report includes inconsistencies such as frequent and large withdrawals or other irregular activities.
  • Address and voting-related—whether or not you change addresses often and/or exercise your voting rights.

Note: Contrary to popular belief, factors like checking out your credit score, the scores of friends and families living at the same address, and incidents from your distant past do not affect your current credit score.

How to Get a Good Credit Score in the UK?

To improve a poor or fair credit score in the UK, take certain sensible steps, including but not limited to the following:

  • Register to vote—lending businesses establish your identity and home address via your voting profile.
  • Establish a credit history—companies are more likely to lend to individuals who have previously established themselves as responsible borrowers in the past.
  • Pay your accounts regularly—lenders appreciate borrowers who pay their bills and submit their credit payments on time and in full on a regular basis. This can be a challenge for some because 7% of households in the UK have a problem with debt..
  • Maintain a low credit utilisation—refrain from maximising your credit limits as lower utilisation is a sign of responsible spending. Brits have racked up almost £60 billion in credit card debt which means you should swipe wisely.
  • Close older credit accounts—even if you can handle repaying several credit accounts, creditors might be apprehensive about offering you additional loans.
  • Check your credit report regularly—be on the lookout for potential fraudsters that may misuse your credit card since they significantly damage your credit score.
  • Distance yourself from partners with poor credit—break free from financial partners with poor credit since their situation affects yours negatively.

Note: Credit scores can take some time to improve (up to several months). Until then, stay vigilant with your finances and complete the steps above regularly.

Ready to Improve?

Hopefully, this article clarified the importance of maintaining a good credit score and the methods to improve it when needed. Ultimately, UK citizens with a good credit rating will have better success in everything from getting a phone contract to buying a house.

                           

Frequently Asked Questions And Their Answers

Is a fair credit score good?

Fair credit scores are adjacent to the lower half of the credit-scoring scale, so you are advised to follow the steps outlined above to improve your credit rating.

What is an average credit score in the UK?

The average credit score in the UK varies depending on which credit rating agency issued your report and consequently calculated your score. As of now, Equifax estimates an average of 383, Experian—759, and TransUnion—547.

Is a credit score of 500 good?

Again, it depends on the credit reference agencies and their credit score ranges. Generally, a credit score of 500 is considered poor to fair, which results in difficulties obtaining credit.

What is a good credit score to buy a house UK?

If you are in the market for a house and wonder what is a good credit score in the UK to secure financing with good terms and rates, note that your luck will depend on the loaning agencies with which you apply. That said, request a loan at several institutions and compare their offers. Before diving into a mortgage, take caution and know that property debt is the major debt among households.