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Credit scores

In its essence, a credit score is a number that lenders (banks, car finance dealers etc.) use to determine the risk associated with loaning money to someone.

These lenders decide how much they’re willing to loan you (and at what interest rate) based on your credit score – it can also be checked by landlords and insurance companies to see how financially responsible you are.

There are many factors that contribute to generating a credit score, but some are seen as more important than others by lenders…

Your payment history.

Lenders want to make sure that any money they loan you will be repaid on time, so making sure all your previous payments have been made on time is a positive mark on your credit score.

Amount owed to other lenders.

Even if you make all your repayments to other lenders on time, the amount borrowed comes into consideration. This is called your ‘credit utilisation’ amount, which measures how much debt you have compared to the credit limits available to you. Ideally, you want to be using less than 30% of your available credit, as this shows lenders that you’re not dependant on it for day-to-day living.

Your credit history length.

How long you’ve been using credit matters, as it shows lenders you’ve kept up with financial obligations for a continued period of time. Even having a standard bank account that’s been open for a long time is a positive mark on your credit score. The older your accounts are, the better – even if they’re not used.

New accounts.

Whenever you open a new account, whether it be a new bank account, a new line of credit, or a new contracted service (such as a mobile phone contract with a new provider), this could appear negatively on your credit score. This is because new lenders or service providers usually do a ‘heard search’ on your credit score when you open an account – the more hard searches you have in a short amount of time, the more negatively this affects your score.

Improving your credit score.

The bottom line is, if you have a demonstrable history of managing your finances responsibly and making payments on time, you’re more than likely to have a good credit score. And as lenders like to see a proven track record of sensible borrowing and money management, this will likely get you the best credit offers and interest rates.

However, if your credit score isn’t quite where you want it to be, there’s still hope. Negative marks on credit scores don’t last forever; most of the information on your credit report is stored for around six years, including things like Debt Management Plans and IVAs, so you can always plan a path to a healthier credit score.

Here are some ways to boost those numbers:

  • Only borrow what you can reasonably afford, and make sure you can (and do) repay the minimum amount each month.
  • Make your payments on time each month – consider setting up Direct Debits to make this process easier.
  • Keep your credit utilisation as low as possible. Owing less than your credit limit is a positive sign to lenders.
  • Don’t close old accounts, even if you don’t use them often or they don’t have a lot of money in them. Lenders like to see that you’ve kept financial obligations for a long period of time.
  • Make sure your address is up to date on everything, especially the Electoral Roll – companies use this to confirm you are who you say you are, so it’s important to keep this updated.
  • When making a large purchase, such as applying for a mortgage or taking out a car finance loan, it’s good practice to check your credit score as far in advance as possible. This will give you the time to make any necessary changes and flag any errors.

How to check your credit score.

There are three main Credit Reference Agencies (CRAs) in the UK; Experian, Equifax, and TransUnion. Each of these CRAs use different scoring methods and ranges to generate credit scores, meaning they’re not directly comparable to each other.

By law, each of these CRAs has to provide you with a copy of your credit score, either digitally or through the post. This service is completely free, and it’ll never damage your score no matter how many times you check it.

If you’d like to view your credit score, click on an option below:


If you’d prefer a paper copy, you’ll need to contact the CRAs directly.

While your credit score is a big factor in determining your eligibility for loans and mortgages (and getting the best interest rates for those products) it’s important not to obsess over the numbers. Generally, as long as you manage your available credit responsibly your credit score will flourish.

If your score has some flaws just remember that these are only temporary. Once some time passes and more positive financial steps are taken, you’ll begin to see your score flourish, too.

We know that times can get tough, and we’re here to support you.

If you’re struggling to manage your finances, get in touch with our team on 0161 837 4000, or email us at

If you’re not quite ready to speak to someone just yet, head to Advice Online, our fully-digital financial advice service that lets you find out which solutions you’re eligible for.

Together, we can live better.