Knowing your credit score and understanding how it works is vital for numerous different financial applications. Whether it’s your first credit card or a mortgage, understanding how credit-worthy you are can be extremely helpful throughout any loan application process; helping you to determine the types of loans you will be accepted for and avoiding those which could potentially reject you, and further damage your credit score.
There are three different credit reference agencies in the UK, meaning you will have three different credit scores. You can find out your credit score by checking with all three of these agencies. You have a legal right to access your credit reports from all three of these agencies.
What are credit reference agencies?
A UK credit report is made up of three credit reference companies (otherwise knowns as CRAs). The three UK CRAs are as follows:
- Experian
- Equifax
- Callcredit
These three companies collect information on your credit history and convert this into a report, calculating your credit score based off of this history. There are many different things that can add to your credit history, and subsequently affect how good your credit score is with each of these three CRAs.
This information is used when assessing your credit score and your guarantor’s score when applying for a guarantor loan.
Boosting a credit score is no quick thing, however there are some very effective methods which, given time, can improve your credit score. Below are some of the main ways in which you can boost your credit score:
- Ensuring payments are not missed (e.g. bills, rent, and other direct debits).
- Closing off any accounts which are inactive.
- Paying off any and all existing debts within their given time limits.
- Building up a healthy history of borrowing (e.g. through credit cards).
“Hard searches”, such as lenders checking your credit report after you’ve applied for loans with them, can have a damaging impact on your score. This is only if you do not have a good enough credit score for the lender’s standards, leading to a rejected application. Therefore, it’s best to know your eligibility before applying for such loans. Read more about search footprints here.
What is a good credit score?
There are five categories of credit scores for each of the UK’s CRAs. These five categories are as follows:
Very Poor – most people with this credit score are likely to get rejected for almost all loans, credit cards and mortgages.
Poor – people with this credit score stand a higher chance of being accepted for loan applications in comparison to those with a ‘very poor’ score, however these will most likely come with considerably high interest rates.
Fair – those with a fair credit score may have average interest rates, however the amount of credit these people can apply for may be fairly restricted.
Good – people with a credit score in this range are likely to be accepted for most loans, credit cards and mortgages, however you may face rejection from the top deals out there.
Excellent – although nothing is guaranteed, people with a credit score in the ‘excellent’ range will most likely be accepted for any loans, credit cards and mortgages.
What are the credit scores for Experian?
Credit scores vary from each agency. Below are the different credit scores for the CRA Experian.
| Very Poor | 0 to 560 |
| Poor | 561 to 720 |
| Fair | 721 to 880 |
| Good | 881 to 960 |
| Excellent | 961 to 999 |
You can find out your Experian credit score by signing up to the CRA’s CreditExpert service. Experian will give you a free trial period of 30 days before charging monthly for its services.
What are the credit scores for Equifax?
| Very Poor | 0 to 279 |
| Poor | 280 to 379 |
| Fair | 380 to 419 |
| Good | 420 to 465 |
| Excellent | 466 to 700 |
You can access your Equifax credit score by signing up to the CRA online. As with Experian, Equifax will also give you a free trial period of 30 days before charging a monthly fee.
What are the credit scores for CallCredit?
| Very Poor | 1 |
| Poor | 2 |
| Fair | 3 |
| Good | 4 |
| Excellent | 5 |
To access your CallCredit score, you can either sign up with Noodle (which is a completely free service) or Credit Compass, a paid service in which customers get daily updates.