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What is a credit score?

Your credit score is a 3-digit number that indicates how reliable you are at borrowing and repaying money – ranging from ‘very poor’ to ‘excellent’.

Here, we look at what is seen to be a good credit score, why it matters and how credit scores are calculated. 

What is a good credit score?

There are 3 main credit reference agencies (CRAs) in the UK: Experian, Equifax and TransUnion. They securely hold data about your financial history – known as a credit report – and use it to generate a credit score.

Each agency has its own scoring system, so your credit score may vary slightly depending on which one you choose. However, you’ll probably find that you fall into the same category across all of them. 

Checking your credit report with a CRA is free and doesn’t affect your credit score.

What ‘fair’, ‘good’ and ‘excellent’ credit scores look like for each CRA:
CRA Excellent Good Fair
Experian 961 to 999 881 to 960 721 to 880
Equifax 466 to 700 420 to 465 380 to 419
TransUnion 628 to 710 604 to 627 566 to 603
What ‘fair’, ‘good’ and ‘excellent’ credit scores look like for each CRA:
CRA Experian Experian
Excellent 961 to 999 961 to 999
Good 881 to 960 881 to 960
Fair 721 to 880 721 to 880
CRA Equifax Equifax
Excellent 466 to 700 466 to 700
Good 420 to 465 420 to 465
Fair 380 to 419 380 to 419
CRA TransUnion TransUnion
Excellent 628 to 710 628 to 710
Good 604 to 627 604 to 627
Fair 566 to 603 566 to 603

Why is your credit score important?

If you apply to borrow money, lenders will look at your credit score before deciding whether to accept your application. It may also help them decide how much to offer you.

A good score can help you get approved for credit cards, loans and mortgages, while a poor score can stop you getting approved. 

If you have a poor credit score, you may find you're offered a higher interest rate. It can also affect other types of credit agreements, such as mobile phone plans.

Explore: 5 reasons to care about your credit score

How are credit scores calculated?

Your credit score is calculated using a points system, based on what’s in your credit report – also known as your credit file – which reflects how you’ve managed your debts and bills in the past. 

For example, if you’ve always paid your bills on time, this would have had a positive impact on your score. But a history of missed or late payments would have had a negative impact. 

If you’ve never borrowed money before, it's difficult for lenders to assess the risk of lending to you and your credit score will reflect that.