We’re often reminded of the importance of a good credit score in getting a good deal on a mortgage, loan or credit card, but it can be difficult to know what ‘good’ really means when it comes to your credit score.
Knowing what credit score you should be aiming for can help you take the necessary steps to achieve it. Whether you’ve never had credit or you have a history of debt, a strong credit score can boost your borrowing capability.
What is a credit score?
In the UK, a credit score (also called a credit rating) is a three-digit number that represents how likely you are to repay money borrowed based on your financial history.
It is is calculated using information about you from public records, financial institutions, service providers, and utility companies and typically ranges from 1-1000.
There are three credit reference agencies or credit bureaus in the UK (Experian, TransUnion, and Equifax). They are responsible for maintaining and updating your credit score, but because they collect different information from various sources, your credit score can differ slightly depending on which credit reference agency you use.
The higher your credit score, the more likely you are to get approved for credit. However, this is not a guarantee. Lenders look at several factors, such as your monthly income, employment status, and total debt, when assessing an applicant.
How much debt do you have?
How is my credit score calculated?
Each credit reference agency calculates credit scores differently, but they all rely on information on your credit report. This means that, while it will be similar across the board, there isn’t a single ‘magic number’ that represents your exact credit score.
Here are some of the things that are factored into creating your credit score:
Payment history
The single most important factor in determining your credit score is your payment history or, in other words, how well you’ve managed payments in the past. Having late or missed payments will lower your credit score as it indicates to banks and credit card companies that you’ve struggled with debt in the past.
Credit history
Another key factor in determining your credit score is how long you’ve had credit. For example, if you’ve only recently taken out a bill or loan in your name for the first time, it’s unlikely that your credit score will have had enough time to reflect how you’ve handled the payments on that credit agreement.
Credit mix
The variety of credit in your name plays a vital role in calculating your credit score. Having a range of credit that you manage well can significantly boost your credit score as it shows that you’re capable of handling several repayments at once and could likely manage another.
Debt-to-income ratio
Another thing that influences your credit score is how much of your monthly income goes towards repaying your debt. Each lender has a different threshold for what they consider an acceptable debt-to-income ratio but anything over 35% is generally considered high risk.
What is a good credit score?
The scoring model used by each credit reference agency varies, meaning what’s considered ‘good’ isn’t unanimous.
Remember, a higher credit score doesn’t necessarily mean you’ll be accepted and a bad credit score isn’t an automatic rejection. Lenders look at several factors to determine whether you’re a suitable candidate for credit.
Here are the latest credit scoring models that each credit reference agency uses:
| Very poor | Poor | Fair | Good | Very good | Excellent | |
| Experian | 0-560 | 561-720 | 721-880 | 881-960 | 961-999 | |
| Equifax | 0-438 | 439-530 | 531-670 | 671-810 | 811-1000 | |
| TransUnion | 0-550 | 551-565 | 566-603 | 604-627 | 628-710 |
How can I improve my credit score?
Whether your credit score has taken a dip due to recent financial issues or you just want to increase your chances of getting a loan or a mortgage, there are many things you can do to improve your credit rating.
Here are some of the steps you can do to boost your credit score:
Register to vote at your current address
When you register to vote at your current address, your details are added to the electoral register (also called the electoral roll). Even if you’re not planning to vote, it is a legal requirement to register.
Lenders check the electoral register to confirm the information provided in your credit application is accurate. If the details match up, they can rule out identity fraud and your credit score will increase as a result.
Make regular payments on time
The last 12 months of your payment history is the single greatest contributing factor when it comes to your credit score. Even if you have missed payments from several years ago, the impact on your credit score will gradually decrease over time.
Maintaining your regular payments (e.g. rent or mortgage and bills) will show lenders you’re capable of sticking to various monthly payments and can be trusted to handle another credit agreement.
Keep your credit utilisation low
Your credit utilisation is the percentage of available credit you’re currently using. The lower your credit utilisation, the better your chances of getting approved for credit.
30% and under is what most lenders look for when reviewing applicants as this proves not you’re not overly reliant on credit and are comfortable with the amount you currently have. To calculate your credit utilisation, divide your revolving credit balance by your total credit limit and multiply by 100.
Check your credit report
Most people assume that because the information on their credit report is collected by credit reference agencies, it must be correct. However, this isn’t always the case and mistakes can – and do – happen.
Checking your credit report regularly can ensure you’re aware of any errors and can report them to the relevant credit reference agency immediately. Even something as trivial as a misspelt surname or an old address could mean your credit score is lower than your financial history reflects.
Get a credit builder card
Getting a credit card to build your credit score might seem counterintuitive, but it can be another way of proving that you’re a reliable borrower who is capable of making regular repayments.
The key to making a credit builder card work for you is to use it regularly for small purchases you know you’ll be able to pay off at the end of the month. However, it’s important not to use all of the credit available to you as this can increase your credit utilisation and have the opposite effect on your credit rating.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
What can damage my credit score?
As well as knowing how to improve your credit score, it’s just as important to know what could potentially cause more damage to it.
Here are some of the main things that could hurt your credit score:
Late and missed payments
One of the main contributing factors to a poor credit score is late and missed payments. Most of us have innocently forgotten to make a payment at one point or another, but failing to make up for the money owed within 30 days can be enough to cause your credit score to plummet.
Late and missed payments also stay on your credit report for up to six years, during which time you’ll struggle to find a lender willing to give you credit.
Frequently applying for credit
Applying for credit too often implies that you’re experiencing financial hardship and are reliant on credit to pay for everyday essentials. Some types of credit also require a hard credit inquiry, which directly impacts your credit score.
What’s more, if you apply for a new credit account several times within a short period and each time your application is rejected, this will cause further damage to your credit score, causing it to drop significantly seemingly overnight.
Sparse credit history
It might seem unfair, but having little or no credit history can prevent your credit score from rising above a certain number as lenders have no evidence that you’re creditworthy. This can happen if you’ve never taken out credit in your name (e.g. you’ve always sent someone money for your half of the bills) or you’ve only recently took out your first credit account.
If you’re looking to get a mortgage soon, it might be worth taking out credit in your name and maintaining your payments for at least six months to reassure lenders that you’re capable of sticking to a credit agreement for a prolonged period.
High credit utilisation
As previously mentioned, a credit utilisation of 30% or more can negatively affect your credit score. This is not always the case, but as a general rule, the less available credit used, the better your chances of being approved for credit.
If you have any outstanding balances and you’re in a position to pay them off, it’s recommended to do so as soon as possible. This can lower your credit utilisation and boost your credit score.
Debt solutions and court judgments
Debt solutions and court judgments harm your credit score because they are both consequences of debt. Although a debt solution will help you deal with your unaffordable debt – which improves your credit rating in the long run – it will be visible on your credit report for up to six years.
Similarly, a court judgment will lower your credit score as it means you’ve ignored a debt for a prolonged period and the court has ordered you to repay it.
What is the average credit score in the UK?
Because each credit reference agency uses a different credit scoring model, the average credit score varies from one company to the next. However, it can be useful to know the average credit score from each credit reference agency to give you a rough idea of what you should be aiming for.
The average Experian credit score is 797 out of a possible 999, Equifax has an average credit score of 644 out of 1000, and TransUnion considers 610 out of 710 to be average. These figures are based on the latest available data and are accurate at the time of writing (March 2025).
Experian also conducted a survey into the highest and lowest average credit score in the UK. The results showed that the City of London had the highest average credit score at 893 and Blackpool had the lowest at 713.
Debt help tailored to you
From writing off a large portion of your debt, to readjusting your budget, we’ll find a solution that suits you.
Conclusion
Having a good credit score can boost your chances of being accepted for credit with favourable terms. Each credit reference agency uses a slightly different credit scoring model to calculate your credit score, but anything above 800 is generally considered good enough for the best loan and mortgage deals.
There are many things you can do to improve your credit score, such as registering to vote at your current address, making regular payments on time, keeping your credit utilisation low, checking your credit report, and getting a credit builder card.
Any late or missed payments on your credit report can damage your credit score for up to six years. It’s important to check your credit report before applying for credit to determine whether you’re likely to get accepted.
