UK Credit Reference Agencies Explained
In the UK there are three main credit reference agencies (CRAs): Experian, Equifax, and TransUnion. Each holds slightly different data from lenders and uses its own scoring model, which means your score can vary between agencies. This is completely normal.
Different lenders use different agencies — some use all three, some use just one. This is why it is important to check your credit report with all three agencies, not just one.
Free Ways to Check Your Credit Score
- ClearScore — uses Equifax data, completely free, updated weekly
- Credit Karma — uses TransUnion data, completely free, updated weekly
- Experian free tier — uses Experian data, basic free account available at experian.co.uk
- MSE Credit Club — uses Experian data, free through MoneySavingExpert
UK Credit Score Ranges (Experian)
| Score Range | Rating | What It Means |
|---|---|---|
| 961–999 | Excellent | Access to best rates; very likely to be accepted |
| 881–960 | Good | Most mainstream lenders will accept you |
| 721–880 | Fair | Accepted by many lenders but not best rates |
| 561–720 | Poor | Limited options; specialist lenders only |
| 0–560 | Very Poor | High chance of rejection; rebuild needed |
What Affects Your Credit Score?
Your credit score is calculated from several factors. Understanding how much each one matters helps you prioritise where to focus your efforts.
1. Payment History (Most Important)
Whether you pay your bills on time is the single biggest factor affecting your credit score. A single missed or late payment can drop your score significantly, and it stays on your credit file for 6 years. Even a payment that is just 30 days late will be recorded. Set up Direct Debits for at least the minimum payment on every account to protect your payment history.
2. Credit Utilisation (Keep Below 30%)
This is the percentage of your available revolving credit (mainly credit cards) that you are currently using. Using £1,500 of a £5,000 combined limit is 30% utilisation. Lenders prefer to see this below 30%, and ideally below 10% for the best scoring impact. High utilisation suggests financial stress, even if you pay on time.
3. Length of Credit History
Lenders like to see a long, stable credit history. The age of your oldest account, your newest account, and the average age of all accounts all play a role. This is why you should avoid closing old, unused credit cards — doing so can reduce your average credit age and hurt your score.
4. Types of Credit
Having a mix of credit types (credit card, personal loan, mortgage) can show that you can manage different forms of borrowing responsibly. However, do not take out new credit purely to diversify — only borrow what you need.
5. New Credit Applications
Each time you formally apply for credit, a hard search is recorded on your file. Multiple hard searches in a short time signal to lenders that you may be desperate for credit. Space applications at least 6 months apart where possible. Checking your own score is a soft search and does NOT affect your score.
6. Electoral Roll Registration
Being registered to vote at your current address is one of the quickest, easiest wins for your credit score. It helps lenders confirm your identity and address. Register at gov.uk/register-to-vote — it takes about 5 minutes and can improve your score within 1–2 billing cycles.
Step-by-Step: How to Improve Your Credit Score
Register on the Electoral Roll
Go to gov.uk/register-to-vote. This is the fastest free win — improves your score within 1–2 months and is used by virtually every lender to verify your identity.
Check All Three Credit Reports for Errors
Errors are more common than you might think. Dispute any incorrect information directly with the CRA or the lender. Correcting an error can improve your score immediately. Check Experian, Equifax (via ClearScore) and TransUnion (via Credit Karma).
Set Up Direct Debits for All Bills
Protect your payment history by setting up Direct Debits for at least the minimum payment on every credit account. Payment history is the most important factor — one missed payment can undo months of progress.
Reduce Credit Card Utilisation
Aim to use less than 30% of your available credit limit across all cards. If possible, pay down balances before your statement date, as this is when most lenders report balances to the CRAs.
Do Not Close Old Accounts
Keep old credit accounts open even if you do not use them. They contribute to your credit age and available credit limit. If a card has no annual fee, there is no cost to keeping it open.
Space Out New Applications
Wait at least 6 months between formal credit applications. Use eligibility checkers (soft searches) before applying to see your chances of approval without affecting your score. Most comparison sites offer these for free.
Use a Credit Builder Card Responsibly
If you have poor or no credit history, a credit builder card can help. Use it for small purchases each month and pay the balance in full before the due date. Do not spend more than you can repay — the high interest rates on these cards make carrying a balance expensive.
Credit Builder Credit Cards
These cards are designed specifically for people with poor or no credit history. They typically have low limits (£200–£500) and higher interest rates (30–40% APR), but used responsibly they can significantly improve your score over 6–12 months.
- Capital One Classic — widely available, 39.9% APR representative
- Vanquis Bank — offers credit limit increases after responsible use
- Aqua Card — free credit score access included, flexible limits
- Barclaycard Forward — for those with limited history, rewards good behaviour with rate reductions
Key rule: Always pay the full balance every month to avoid interest charges. Set up a Direct Debit for the full balance so you never miss a payment.
Thin Credit File: No Credit History
A thin credit file means you have so little credit history that lenders cannot assess your creditworthiness. This affects new graduates, people who have recently moved to the UK, and those who have always paid cash. You will be treated similarly to someone with a poor credit score, even though you have done nothing wrong.
How to build credit from scratch:
- Register on the electoral roll immediately
- Open a credit builder credit card and use it for one small purchase per month, paying in full
- Consider a credit builder loan — you make fixed monthly payments and receive the sum at the end
- Ensure utility bills and phone contracts are in your name
- Check if you are linked to someone with a poor credit history (financial association) — if so, you can apply for a Notice of Disassociation
Impact of Missed Payments and CCJs
Missed payments remain on your credit file for 6 years from the date of the missed payment, not from when you caught up. The impact fades over time, with the most severe effect in the first 2 years.
A County Court Judgement (CCJ) is recorded when a creditor takes you to court for an unpaid debt and wins. It stays on the Register of Judgements for 6 years and severely damages your credit score. If you pay the full amount within 30 days of the court order, you can apply to have it removed (a 'certificate of satisfaction'). If you pay after 30 days, you can mark it as 'satisfied' which is better than unsatisfied but it still appears.
If you believe a CCJ was issued incorrectly or without your knowledge, you can apply to the court to have it 'set aside' using form N244.
Credit Score Improvement Timelines
| Action | Estimated Impact | Timeframe |
|---|---|---|
| Register on electoral roll | Small to moderate positive | 1–2 months |
| Reduce credit utilisation below 30% | Moderate positive | 1–2 months |
| Dispute and correct credit file error | Can be significant | 4–8 weeks |
| Consistent on-time payments | Gradual improvement | 3–6 months |
| Credit builder card (responsible use) | Moderate improvement | 6–12 months |
| Missed payment — fade in impact | Reduces gradually | 2–3 years |
| Defaults, CCJs, serious arrears | Remains significant | 3–6 years |
| Bankruptcy / IVA removed from file | Full removal | 6 years |