What affects your credit score

Understand your credit score

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If you want to get the most competitive loan and credit card deals, you'll need a good credit score. Find out why it matters.

What is a credit score?

Your credit score is a rating based on your financial history. Credit reference agencies, primarily Experian, Equifax and TransUnion, calculate your score based on how well you’ve managed your accounts in the past. The better your financial history, the higher your credit score will be.

Your score can move up or down depending on how you manage your finances.

Having a good credit score is important as it can help you get accepted for cheaper rates on credit cards and loans, which helps bring down the overall cost of borrowing. Your credit score can also affect your chances of getting a monthly phone contract, or having the option to pay monthly for your car insurance or home insurance.

Is there one universal score?

No – each credit reference agency will rate and rank information according to its own criteria, so your score may differ across Experian, Equifax and TransUnion.

How can I get my credit score?

You can get your credit score for free with Credit Monitor  . TransUnion calculates your score, and we’ll give you helpful, personalised hints and tips on how you might improve your score. We’ll also keep a close eye on your credit file and let you know about any suspicious activity, so you can look into it quickly.

How do lenders use credit scores?

Lenders give you a credit score based on their own criteria. They’ll set a minimum score you need to reach to be eligible for the credit you’re applying for.

If you score under a lender's threshold, it may decide not to lend you the money, or it may charge you more to do so. Some lenders specialise in loans for riskier customers and may offer credit where another bank might not.

Lenders don't have to tell you what your score is or how they worked it out – but they should give you a basic explanation of how scoring works, and whether your application has been refused because of your credit score or your credit report. They should also tell you which agency they used, so you can correct anything that is wrong in the report.

Who gets advertised rates

What can affect your credit score?

Several factors can affect your credit score, including:

  • Your payment history (including whether you’ve missed payments or have CCJs)
  • Whether you’re registered on the electoral roll
  • How much you owe and how much of your available credit you are using, often called ‘credit utilisation’ by lenders  
  • The affordability of what you’re asking for, given your earnings and the amount you owe
  • The length of your credit history
  • How much new credit you have - if you have made a lot of recent applications for credit, you are likely to be a greater credit risk.

What should you do if your credit score is poor?

If your score is lower than you’d like, try not to panic - there’s lots you can do to improve your credit score

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