What Is a credit Score?

A credit score is a three-digit number generated by credit reference agencies (called credit bureaus in the US and Canada) that summarises your borrowing history and predicts how likely you are to repay future debt. Lenders check it every time you apply for a mortgage, loan, credit card, mobile phone contract, or even some rental agreements.

The score is calculated using data in your credit report - a detailed record of every credit account you have opened, every payment made or missed, how much of your available credit you use, and how long you have been borrowing. The better your borrowing history, the higher your score.

Your credit score does not just affect whether you get approved - it determines the interest rate you are offered. A borrower with an excellent credit score applying for a mortgage could be offered a rate 0.5-1.5% lower than someone with a poor score. On a £250,000 mortgage, that difference can amount to tens of thousands of pounds over the term.

credit Score Ranges by Country

Country / BureauScore RangeGood ScoreExcellent Score
UK - Experian0-999881-960961-999
UK - Equifax0-1000531-670811-1000
UK - TransUnion0-710604-627628-710
US - FICO Score300-850670-739800-850
US - VantageScore300-850661-780781-850
Canada - Equifax300-900660-724760-900
Australia - Equifax0-1200622-725833-1200

How Is Your credit Score Calculated?

credit agencies do not publish their exact formulas, but the main factors are well understood. The five key factors (with approximate weightings) are:

Most important

Payment History (~35%)

Whether you pay on time, every time. A single missed payment can drop your score by 50-150 points and stays on your file for 6 years. This is the single biggest factor in every credit scoring system globally.

Very important

credit Utilisation (~30%)

How much of your available credit limit you are using. Using more than 30% of your total limit is seen negatively. Staying below 30% - ideally below 10% - shows lenders you are not over-reliant on credit.

Important

credit History Length (~15%)

How long your accounts have been open. Older accounts show a longer track record of responsible borrowing. Closing old credit card accounts can reduce your average account age and lower your score.

Moderate

credit Mix (~10%)

Having a variety of credit types - credit cards, loans, a mortgage - can slightly boost your score. It shows you can manage different kinds of borrowing responsibly.

Moderate

New credit / Hard Searches (~10%)

Each time you apply for credit, the lender performs a hard search on your file. Multiple applications in a short period can signal financial stress and temporarily reduce your score by 5-20 points per search.

UK specific

Electoral Roll Registration

Being registered on the electoral roll at your current address is a quick way to improve your UK credit score. It helps lenders verify your identity and address. Registration is free via gov.uk.

How to Check Your credit Score for Free

All three main UK credit bureaus offer free access to your report and score:

  • Experian: Free score via creditMatcher; full report free via the statutory access route or £14.99/month for full monitoring.
  • Equifax: Free 30-day trial, then £7.95/month; free statutory report available.
  • TransUnion (via credit Karma): Free access, no trial required. Updates weekly.

In the US, you are entitled to one free report per year from each bureau via AnnualcreditReport.com. In Canada, check Equifax and TransUnion for free online. In Australia, check via Equifax, Experian, or illion (each free once per year).

Checking your own score

Checking your own credit score is a soft search - it has zero impact on your score. Only hard searches (when a lender checks your file for a credit application) affect the score. Check your score as often as you like.

Why Your credit Score Matters Beyond Borrowing

  • Rental applications: Many landlords and letting agents run credit checks on prospective tenants.
  • Mobile phone contracts: A 24-month contract is a form of credit and involves a hard search.
  • Car finance (PCP/HP): The interest rate offered on car finance deals is directly tied to your credit profile.
  • Utility contracts: Some energy suppliers run credit checks before agreeing to supply on credit terms.
  • Insurance (US): Many US insurers use credit-based insurance scores to determine premiums. This practice is not permitted in the UK.

Frequently Asked Questions

No. Checking your own credit score is a soft search, which is not visible to lenders and has no impact on your score. Only hard searches - made by lenders when you apply for credit - temporarily affect your score. You can check your score as often as you like.
In the UK, most negative information - missed payments, defaults, CCJs - stays on your credit file for 6 years from the date of the incident, regardless of whether the debt has been repaid. Bankruptcies also remain for 6 years from the discharge date. In the US, most negative marks stay for 7 years (10 years for bankruptcy).
Yes, but it can be difficult. With no credit history, you have no data for bureaus to score. This is called being credit invisible and can make it hard to access mortgages or loans when you need them. Consider getting a low-limit credit card, using it for small purchases, and paying it in full each month - this builds a positive payment history without carrying expensive debt.
In the UK, you are only financially linked to someone if you have a joint financial product - a joint bank account with an overdraft, a joint mortgage, or a joint loan. Living with someone does not link your credit files. Once you take out a joint product, your co-applicant's credit history can affect your score, and vice versa.
Important: credit score information is educational only. Scores vary between bureaus and lenders use their own internal scoring models. Always check current score ranges directly with each bureau.