To put it simply, a good credit score is one that demonstrates you are responsible with money. But there’s more to it than that. It’s also important to know who decides your credit score and how they work it out.
You have more than one credit score
This is because the UK has three credit reference agencies: Equifax opens in a new tab , Experian opens in a new tab and Call Credit opens in a new tab . Each keeps a separate file on your financial history that lenders use when they do a credit check. Some lenders use all three agencies, while others might only use one.
Credit reference agencies use different score numbers
Each agency has their own way of calculating your score, so you will probably have a different score number with each. Don’t get too caught up in the numbers, just aim to be near the top of their scale.
Generally, if you have a good credit score from one, it’s likely you’ll have a good score with the others too. It’s still worth checking your credit score with all three, just to make sure there are no mistakes on your file that could be holding you back.
Lenders ultimately decide your credit score
Although credit reference agencies do give you a credit score (sometimes also called a credit rating), it’s still up to the lenders to decide whether to lend to you or not.
Lenders will typically use your credit score together with the information you provide in your application to decide how much of a risk you might be. Or to put it another way, how likely you are to pay them back.
Different lenders have different ways of working this out, depending on the types of products they offer, and the customers they choose to lend to.
Check your credit score
Checking your credit score with credit reference agencies is a great way to get an idea of your overall credit health. Your credit score can change over time, and there’s lots you can do to improve it. Follow our 7 Simple Steps to improving your credit score today.
Use eligibility checkers before you apply
Some credit card companies, like Capital One, offer free eligibility checkers that can let you know the likelihood of being accepted before you apply.
This is a useful way to check if you’ll be accepted, without impacting your credit score.