Need help reading this page? Click to activate Recite Me popup.

What is a ‘bad’ credit score?

If your credit score is on the low side, it could be harder to get credit when you need it.

What does a bad credit score mean?

  • The lower your credit score is, the more difficult it could be to get a mortgage, credit card, personal loan, overdraft or car finance application accepted.
  • Depending on the type of borrowing, you might be offered higher interest rates and a lower credit amount, based on the potential risk of offering you credit.
  • Bad credit might also affect your ability to get some jobs, e.g. in legal or financial services.

What causes a bad credit score?

Credit reference agencies collect information about you from public records, lenders and other service providers. Things that can impact your credit score are:
 

Your borrowing history

If you’ve little or no experience with credit, or you’ve made mistakes in the past, that could impact your credit score.

Court records

Defaults, County Court Judgements (CCJs), Individual Voluntary Agreements (IVAs) and bankruptcy might impact your credit score for up to six years.

Moving home

Your address links your financial activity and identity, helping to prevent fraud. Having one address for a long time also suggests your circumstances are more stable.

Arrears and missed, late or defaulted payments

Making payments on time shows that you can borrow responsibly. Utility and other household bill payments count too.

Credit applications

Whether or not you’re accepted, ‘hard’ credit searches could impact your credit score, especially if you make a number of full applications in a short period of time.

The way you manage accounts

Things which could impact your credit score include going over your agreed credit limits, or carrying a high amount of debt.

Not being a registered voter

Being on the electoral roll is one way that your identity and home address can be confirmed, which could improve your credit score.

Joint accounts count

Things like bank accounts, mortgages and even utility bills could create a financial link between you and any joint account holders. This could impact your future credit eligibility if the joint account holder doesn’t have a good credit score.

People you’re linked to financially will show on your credit record. If you’re no longer linked to someone, you could contact each credit reference agency to submit a notice of disassociation.
 

More on what affects your credit score

Taking control of your finances

If you find it difficult to manage your budget and borrowing, that could be a barrier to you improving your credit score in future, so it might help to check out our tips and tools.

More on managing your money

What counts as a ‘bad’ credit score?

The scale used by each credit reference agency varies, but as a general rule, the higher your credit score is, the better your chances are of being accepted when you apply for credit.

Having a low score doesn’t always mean an application won’t be accepted – lenders and service providers also consider other factors, like affordability and any past account history – you might just be offered higher interest rates, and a more limited amount of credit.

Below are examples from the credit reference agencies Halifax work with:

Experian

Excellent

Very good

Good

Poor

Very poor

Excellent

961 - 999

Very good

881 - 960

Good

721 - 880

Poor

561 - 720

Very poor

0 - 560

Equifax

Excellent

Very good

Good

Poor

Very poor

Excellent

811 - 1000

Very good

671 - 810

Good

531 - 670

Poor

439 - 530

Very poor

0 - 438

TransUnion

Excellent

Good

Ok

Needs some work

Needs work

Excellent

628 - 710

Good

604 - 627

Ok

566 - 603

Needs some work

551 - 565

Needs work

0 - 550

More on credit scores and how they work

How to improve a bad credit score

It’ll take time, but there are a number of things you can do which might improve your credit score:

  • Paying bills on time – including credit card, utility and other household bills.
  • Managing accounts well – stay below your credit card limits and try to reduce debit balances whenever possible.
  • Limiting new applications – whether or not you’re accepted, ‘hard’ credit searches could impact your credit score, especially if you make a number of full applications in a short period of time.
  • Registering to vote – being on the electoral roll is one way that your identity and home address can be confirmed, which could help to improve your credit score.

More on improving your credit score

 

How to check your credit report and score

It’s a good idea, especially if you’re planning to apply for credit, to check the details held by each credit reference agency. If you spot something that’s wrong, you could submit a data dispute to the relevant agency, so they can investigate and update their records accordingly.

The agencies used by Halifax include TransUnion, Experian and Equifax.

Check your credit score with Halifax

A summary on bad credit scores

A low credit score could make it harder to get credit, or limit your borrowing options.

  • Lots of factors can contribute to a low credit score, including little or no credit history, missed payments, past financial difficulties, and even moving home regularly.
  • Credit reference agencies collect information from public records, lenders and service providers, helping them to set your score. Each agency has their own measurement scale.
  • Lenders do their own scoring when you apply for credit, including information from your credit record, as well as factors like affordability and past account history.
  • You might be able to build your score in a number of ways, from making payments on time and managing accounts well, to limiting new credit applications and registering to vote.
  • The information held by each credit reference agency can differ, so it might be a good idea to check your credit scores and reports with TransUnion, Experian and Equifax.

Want to read more?

Applying for credit

How does a credit score work?
How to improve your credit score
What is a good credit score?
Why has my credit score gone down?
What affects your credit score?

Using credit

How to pay for a car
How to pay for a wedding
How to pay for a holiday
How to pay for home improvements

Ways to borrow

Credit cards
Loans
Car finance
Overdrafts
Mortgages

Know where you stand with Halifax

Sign up for ‘Your Credit Score’ to see your rating with TransUnion. It’s free to check and won’t hurt your credit score.

More on Your Credit Score