Just over a quarter of people in the UK have never checked their credit score, according to credit monitoring service CredAbility. But why does this matter?
Credit scores are a way of showing you how lenders may assess your credit application.
Typically, the higher your score, the more credit products (e.g. loans, credit cards and mortgages) you’ll have access to. Plus, you’re more likely to be offered better rates. Therefore, knowing your score and how it works can help you boost your chances of being approved for credit.
Your score is updated at least once a month, and different actions affect it in different ways. The impact varies depending on your full credit history, not just one thing in isolation. To give you a clearer idea of what to expect, we explain who decides your credit score and break down some of the most common score-changers.
The UK has three main credit reference agencies (CRAs) - Experian, Equifax, and TransUnion. They each create a version of your score using their own scale, and they don't all hold the same data.
Because of this, your score can look very different depending on which CRA you check. In this article, we’ve used Equifax data analysed by CredAbility.
Equifax scores you on a scale of 0 to 1,000 and breaks it down into five bands.
| Score | Band |
|
0 – 438 |
Poor |
|
439 – 530 |
Fair |
|
531 - 670 |
Good |
|
671 – 810 |
Very good |
|
811 – 1,000 |
Excellent |
Here are the actions that can help push your Equifax score in the right direction.
One of the quickest and easiest wins. Lenders use the electoral roll to confirm your name and address, so being on it builds trust right away.
Consistent on-time payments are the single biggest positive driver of a healthy credit score. Even small, regular payments make a difference over time.
Credit utilisation is the percentage of your available credit that you're currently using. Keeping it below 30% is a good rule of thumb — and the lower, the better.
It’s useful to demonstrate some credit use. Making small purchases on a credit card, e.g. paying for petrol, and then paying them off straight away will leave a positive footprint on your report.
Using a credit card regularly and paying it off each month shows lenders that you can handle credit responsibly — and that's a great signal for your score.
Keeping up with your mortgage repayments every month builds a strong track record with lenders — and a mortgage is one of the most positive things you can have on your credit report.
Nobody wants to see their score go down, so knowing what to avoid may help you. Here are the things that are most likely to have a negative impact on your Equifax score.
Every time you apply for a loan, credit card, or mortgage, a hard search is recorded on your report. Too many in a short space of time can make lenders nervous as you may appear too reliant on credit.
A missed payment stays on your credit report for six years, and the more recent it is, the harder it hits. If it’s a one-off occurrence that happened years ago, it will have less of an impact than multiple newer ones.
A default is recorded when you've missed multiple payments and the lender closes your account. It's one of the more serious marks on a credit report.
A CCJ is a court order requiring you to repay a debt. It can carry significant weight and stays on your report for six years.
Bankruptcy is one of the most serious financial events that can appear on a credit report and has a long-term impact. Although in isolation, the points lost doesn’t look huge, bankruptcy will likely occur alongside other factors which, when combined, can have a big effect on your score.
Although these point changes above are based on Equifax's guidance, the same principles should apply across all three CRAs.
Your actual score change will depend on your individual credit history — so two people doing the same thing might see different results. Someone who's new to credit, for example, might experience a bigger change than someone with years of borrowing history behind them.
You can check your Equifax score for free through CredAbility, which updates weekly and gives you a clear view of what's helping or hurting your score.
Your credit score isn't fixed — it moves with your financial behaviour. Every positive step you take adds up, and even if your score has taken a hit recently, it can recover. It just takes a little time and consistency.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Zubin is a personal finance writer with an extensive background in the finance sector, working across management and operational roles. He applies his experience in customer communication to his writing, with the aim of simplifying content to help people better understand their finances.
