There is no universal method of calculating a borrower's credit score in the UK. The range varies from one credit reference bureau to another.
Lenders in the UK use the credit score of a borrower as one of the factors for determining their eligibility for credit. Other factors such as monthly income, credit history with the particular lender, and duration you have worked for your current employer may also come into play. Therefore, you need to find a balance in all these factors epically your credit score. There are three primary credit reference bureaus in the UK that provide your credit information to lenders: Experian, Equifax, and MyCreditMonitor.
Highest Experian credit score
The top credit score you can get on Experian is 999. It ranges from 0 to 999, where between 0 and 560 is considered very poor with an excellent score starting from 961 to 999. Other credit ranges include 561-720 = Poor, 721-880 = Fair, and 881-960 = Good. At 961 and above, most lenders consider borrowers within this range to be low-risk. A credit rating of 999 means the borrower has no problem in paying their debt.
Highest Equifax credit score
The highest credit score possible on Equifax is 710. An excellent rating begins at 467 and above where most lenders view you as a low-risk borrower. Other credit ranges on Equifax include 0-278 = Very Poor, 79 - 366 = Poor, 367- 419 = Okay, and 420-466 = Good.
Highest credit score on MyCreditMonitor
The highest rating a borrower can get on MyCreditMonitor is 999. An excellent credit score ranges between 635 and 999. Anything less than 559 is considered poor credit and the borrower is viewed as high-risk.
What is a credit score in UK
Find out the average credit score in the UK using the information below.
As you all know, a credit score is the one helping measure an individual's creditworthiness. Having low credit score means that you are high-risk while having a higher credit score proves that you are creditworthy.
Usefulness of credit score in UK
A credit score is useful in making decisions for lending companies and banks. This is one of their primary basis if they are going to grant you the loan or the credit card that you need. That is why it is important always make sure that you have a good credit score.
Low Credit Score
If you happen to have a low credit score, then you know that your chances of getting approved are low. But you can still get approved though lending companies might offer you with higher interest rates.
How are credit scores calculated in UK
A credit score ranges from 0 to 999 depending on the different models that are used by various credit bureaus or credit firms in the country. Higher the credit, higher is the probability of the person paying back the loan.
In England, like many other developed countries, some variables account for the credit score. These variables include the following:
First is your personal information. Secondly, the credit history of the person applying for the loan. The number of inquiries made for credit in the recent past is also considered when your credit score is determined. Your public records also play a significant role in the calculation of your credit score.
Whenever you apply for a loan, your credit score will be considered to evaluate the level of risk involved in lending you the loan.
Explanation of credit score ranges in UK
Knowing what category you fall into when it comes to your credit score is essential, for you to know what to expect when applying for a loan or a credit card.
There are different explanations of credit score ranges in the UK that you need to know. They usually range from 0 to 999 and knowing what category you fall in is important. Here are some of the information that you need to know.
Very Poor
Very poor credit ranges from 0 to 560. People with this credit score will have a hard time getting approved because most lenders will think that they don't have the capabilities of repaying their credit.
Good to Excellent
Good to excellent credit score ranges from 721 to 999. They are the ones that can easily get approved when it comes to applying for loans and credit cards. They also get the lowest interest rates.
Things you can do to improve your credit score UK
You may be denied credit in the UK if you have a low credit score, and when approved you are given a small amount with a high rate of interest. You need to take your time to manage and improve your credit score for better credit terms. Lenders prefer to work with borrowers with high credit scores because they have proved their financial prudence.
Make timely payments
Any late payment or default remains on your credit report for up to six years thus affecting your rating. Making timely payments puts you in good financial books and will forward a favorable report of you to credit agencies, which increases your rating. Whenever you encounter difficulties in making payment, inform your lender to give a grace period otherwise you risk damaging your credit score.
Register on the electoral roll
Your credit score can be boosted if you get registered on the Electoral Roll using your current address. Doing this would cut the delays when applying for credit since you are required to verify your residence. Some lenders can even deny you loans if they can't prove your residence.
Cut links with bad credit partners
You are connected financially to a partner whom you have a joint account with or take mortgage together. Their bad credit score could affect yours negatively. You should inform your credit agency when you dissociate with your financial partner, husband or wife. Failure to do this means that their financial undertakings keep impacting your credit score.