What is a ‘good’ credit score?

When checking your credit score, it’s useful to know what ‘good’ looks like.

How is a credit score worked out?

Credit reference agencies collect information about you from court and electoral registers, and from lenders or other service providers.

Lots of factors can affect the credit score generated by each agency, including recent credit applications, the amount you’ve already borrowed, and things like missed or late payments.

Although they use different measurement scales, the credit reference agencies working in the UK have a similar idea of what a ‘good’ credit score looks like.

It’s useful to know though, lenders and service providers might do their own scoring when you apply for credit, looking at information from your credit record. They also consider other factors like affordability and any past account history.

More on credit scores and how they work

What are the benefits of a good credit score?

  • The higher your credit score is, the more likely it could be that an application for a mortgage, credit card, personal loan, overdraft or car finance will be accepted.
  • Depending on the type of borrowing, the lowest and longest lasting interest rates might be offered to low risk applicants, who’ve shown they can manage credit well over time.
  • Your credit score can also influence the amount of credit you’re offered.
  • Bad credit might affect your ability to get some jobs, e.g. in legal or financial services.

What counts as a good 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 good credit score isn’t a guarantee you’ll be accepted – lenders and service providers look at other factors including affordability and any past account history – but it can give you a quick idea about your financial position at any moment in time.

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

Very good

Good

Poor

Very poor

Excellent

628 - 710

Very good

604 - 627

Good

566 - 603

Poor

551 - 565

Very poor

0 - 550

Checking your credit score and report

Lenders and service providers regularly use information held by credit reference agencies, helping them to measure the risk of offering new credit.

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.

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

Check Your Credit Score with Halifax

What can improve your credit score?

There are a number of things you can do, which might improve your credit score over time:

  • Paying bills on time – including credit repayments, utility and other household bills.
  • Managing accounts well – stay below your credit card limits and try to reduce your balances whenever possible.
  • Limiting new applications – whether or not you’re accepted, ‘hard’ credit searches could impact your credit score.
  • Registering to vote – it could boost your credit score if you’re on the electoral register.

More on how to improve your credit score

 

What can lower your credit score?

Things which could improve your credit score, can also damage it if you don’t do them consistently:

  • Missed or late payments – it could be a good idea to set up Direct Debits to make payments automatically. Lenders and service providers may be able to help if you ever find yourself experiencing financial difficulties and can’t manage your payments.
  • The way you manage your accounts – it could impact your credit score if you have a lot of existing debt, or you go over any agreed credit limits.
  • Making lots of 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.
  • Not being on the electoral register – being on the electoral roll is one way that your identity and home address can be checked, which could help to improve your credit score.

More on what affects your credit score

Lenders also check

Details you provide

As part of a credit application you’ll be asked for some personal and financial information, which could include your address, employment status, income and regular expenses.

What you can afford

Lenders might review what you can reasonably afford to repay, based on your income, outgoings and anything you’ve already borrowed.

Your account history

Lenders usually keep records about accounts you’ve held with them in the past, including whether or not they were managed well.

A summary on good credit scores

Having a good credit score could help you to get lower interest rates and higher credit limits.

  • To generate a credit score, credit reference agencies collect information from public records, lenders and service providers. Each agency has their own measurement scale.
  • When you apply for credit, lenders and service providers might check your credit record as part of their decision-making process.
  • The information held by each credit reference agency can differ, so it might be a good idea to check your scores and reports with TransUnion, Experian and Equifax.
  • You might be able to build your score over time, for example, by managing accounts well, limiting new credit applications and registering to vote.

 

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