What is a good credit score UK?
Your credit score is a measure of how well you manage your money, and particularly your debt. You can think of it this way: If managing your money was an exam, your credit score is your exam result.
There are different organisations that calculate your credit score, and they all use slightly different data and different scoring systems.
Unfortunately this means it’s impossible to say what number you need to score to be ‘good’ or ‘excellent’, as it varies depending on which credit reference agency compiles the report.
However, if you sign up for any of the online services to check your credit file, it should not only tell you your score, but also tell you whether that score is considered good according to the relevant agency.
Is my credit score good UK?
A higher credit score is better, so if your score is in the high hundreds, that’s usually excellent, or at least very good.
If you want to know what the maximum possible credit score would be, check the Help or FAQs pages of the particular credit reference agency who compiled your report, as it varies according to the different agencies.
And if you’re interested in improving your credit score, then remember that you want the number to increase over time, and check regularly to find out how you’re doing.
How to increase my credit score
There are a few things you can do to improve your credit score:
- Make sure you pay your bills on time and in full. A missed payment will harm your score.
- Use credit cards, but don’t use the full credit limit. Stay at around 50% at most.
- Don’t apply for too many financial products at once – you can look desperate for a loan.
- Get your name on the electoral roll for your current address.
- Check your credit report for errors, and request a correction if necessary.
- Manage your finances well over time to gradually build an even better score.
Some of these rules of thumb might sound strange, for instance that you get a better credit score by having a credit card than by not using debt at all – but this is because it sends a clear signal to lenders that you can use debt responsibly, whereas if you’ve never used a credit card, it’s harder to know if you can be trusted with it.
Likewise, some of the rules might sound limiting, such as only spending half of your credit card limit, and avoiding too many applications for new credit.
There’s not much you can do about this, although by applying for products that don’t involve a credit check and making sure you are eligible so you don’t get a rejection on your file, you can keep your credit score looking healthier.
Taking on more borrowing in an attempt to boost your credit score might not be the right idea for you – and it could be more effective to tackle your existing debts, if you have any, to show that you are working towards becoming debt-free.
Your credit report will usually highlight any loans in your name, including big things like mortgages, and smaller things like credit agreements on contract mobile phone handsets.
By overpaying on your repayments on these, you can clear them from your credit report, and your score might benefit from this as you show your commitment to completing your credit agreements ahead of time.
Lenders want to know they will get their money back, but they may also want to know they will make some money from you in interest charged on the debt – so again, it’s a balancing act to get it just right.
Get an Arro Personal Account with no credit check
The Arro Personal Account can help you to turn around a poor credit score. There’s no credit check involved in the application process, so if your credit score is already bad, you will not be rejected because of that.
As there’s no credit check, your application will not show on your credit record – so if you are worried about lots of applications for accounts appearing on your file, this is one account where that is not going to happen.
You don’t get an overdraft and the MasterCard® you receive is a debit card, so if you’ve struggled to keep your borrowing under control in the past, this is an account with less temptation to overspend.
Keep your balance in the positive and make sure you don’t miss payments on your bills and loans, and you should soon see this reflected in a more positive credit report.