UK Credit Score Guide 2025 | How It Works

Your credit score is one of the most important numbers in your financial life. It influences whether you can get a mortgage, a credit card, a car on finance, or even certain mobile phone contracts. Yet many people in the UK do not know their score, do not understand how it is calculated, or do not know that there is not just one score — there are three separate agencies producing three different scores. This guide covers everything you need to know in plain English.

What Is a Credit Score?

A credit score is a numerical representation of your creditworthiness — how likely you are, based on your past financial behaviour, to repay borrowed money on time. In the UK, credit scores are calculated by Credit Reference Agencies (CRAs), which collect data from lenders, public records, and other sources.

When you apply for credit — a mortgage, loan, credit card, or overdraft — the lender typically performs a credit search on your file with one or more CRAs. The lender then uses that data, combined with their own internal criteria, to decide whether to lend and on what terms. A higher credit score generally means better chance of approval and access to lower interest rates.

The Three UK Credit Reference Agencies

Three Credit Reference Agencies operate in the UK: Experian, Equifax, and TransUnion. All three hold data about you, but the data they hold can differ — not all lenders report to all three CRAs, and the information may update at slightly different times. This is why your score can vary between agencies.

Score Ranges Explained

The different scales can be confusing, but what matters most is which band your score falls into — and how lenders interpret that band. Here is a practical summary of what each band means for your borrowing:

Free Credit Score Services

You do not need to pay to see your credit score. All three CRAs offer free access to your credit score and report:

It is worth checking all three agencies regularly, as different lenders use different CRAs. Errors on any one report can affect your applications. You are entitled by law to a statutory credit report from each agency for a fee of £2, though the free services above typically provide more detailed information.

What Affects Your Credit Score

Credit scores are calculated from the data on your credit file. The factors and their approximate weightings (which vary by CRA and model) are broadly:

Payment History (Most Important)

Whether you pay bills on time is the single most important factor. Missed payments, defaults, County Court Judgments (CCJs), and Individual Voluntary Arrangements (IVAs) all severely damage your score and remain visible on your file for 6 years from the date of the event. Even one missed payment can reduce your score significantly.

Credit Utilisation

This is the percentage of your available revolving credit (credit cards, store cards, overdrafts) that you are currently using. A utilisation below 30% is recommended; below 10% is ideal. Maxing out credit cards — even if you pay them in full — creates a temporarily poor utilisation ratio that can be visible when lenders request your file.

Length of Credit History

Older accounts demonstrate a longer track record of managing credit. Closing old credit card accounts can reduce your average account age and potentially reduce your score, even if the card is not used. This is one reason to be cautious about closing old accounts entirely.

New Credit Applications

Each hard search (a search performed by a lender when you apply for credit) remains on your file for 12 months. Multiple applications in a short period can suggest financial stress to lenders and reduce your score. Use eligibility checkers (soft searches) before applying to gauge your likelihood of acceptance without leaving a hard footprint.

Credit Mix

Having a variety of credit types — such as a credit card, a personal loan, and a mobile phone contract — can marginally improve your score by demonstrating that you can manage different types of credit responsibly. This is the least important factor and should never drive you to take on unnecessary debt.

Electoral Roll Registration

Being registered to vote at your current address is one of the quickest and most impactful steps you can take. Lenders use the electoral roll to verify your name and address. If you are not registered, it can significantly harm your score. Register at gov.uk/register-to-vote — it is free and takes a few minutes.

What Does NOT Affect Your Credit Score

There are several common misconceptions about what is included in credit score calculations:

How to Improve Your Credit Score

1. Register on the electoral roll at your current address immediately. This is the single quickest improvement for most people.
2. Pay all bills on time, every time. Set up Direct Debits for at least the minimum payment on all credit accounts. Even one missed payment is very damaging.
3. Reduce credit card utilisation below 30%. If your limits total £5,000, keep balances below £1,500. Pay down balances or request credit limit increases to improve the ratio.
4. Space out credit applications. Leave at least 3 months between applications. Use soft-search eligibility checkers before applying for credit cards or loans.
5. Do not close old accounts unless they carry annual fees. Old accounts in good standing contribute positively to average account age.
6. Check all three credit reports for errors. Incorrect addresses, fraudulent accounts, or outdated defaults must be disputed immediately. Write to the relevant CRA with evidence.
7. Add a notice of correction to your credit file if you have an unusual circumstance (e.g. job loss during COVID) that explains missed payments.
8. Build credit history with a credit builder card if you have little or no credit history (see below).
9. Consider a credit builder loan offered by some credit unions and specialist providers — you make regular repayments, building your history, and receive the full amount at the end.

Credit Builder Cards

Credit builder cards are designed for people with poor or limited credit history. They typically have low credit limits (£200-£1,500) and high APRs (30-60%). The strategy is to use the card for small regular purchases, then pay off the full balance each month — this demonstrates responsible use and builds positive payment history without incurring interest charges.

Credit Scores and Mortgages

Mortgage lenders have much stricter credit requirements than credit card providers. Most mainstream lenders (Nationwide, Barclays, HSBC, Halifax, NatWest) require a good to excellent credit score with no adverse history in the past 3-6 years. However, "adverse credit" is a spectrum, and a specialist whole-of-market mortgage broker can match you to lenders based on your specific circumstances.

CIFAS Markers and Your Rights

CIFAS (Credit Industry Fraud Avoidance System) is the UK's leading not-for-profit fraud prevention service. A CIFAS marker on your credit file means either:

• Protective Registration: You have applied for this yourself because you have been a victim of fraud or identity theft. It flags to lenders to take extra care when processing applications in your name.
• Warning Marker: A CIFAS member organisation has recorded suspected fraudulent activity associated with your name or address. This can make it extremely difficult to obtain credit, open bank accounts, or pass certain employment checks.

If you believe a warning marker has been placed incorrectly, you can:

1. Submit a Subject Access Request (SAR) to CIFAS to see what data is held about you (free of charge, GDPR right)
2. Request the specific member organisation that filed the marker to review their decision
3. Raise a complaint with CIFAS's independent adjudicator if the organisation does not resolve the issue
4. Complain to the Information Commissioner's Office (ICO) if you believe your data has been processed unlawfully

Your Statutory Credit Report Rights

Under the Consumer Credit Act 1974 and GDPR, you have the right to access your statutory credit report from each of the three CRAs for a fee of £2. You also have the right to:

• Request a correction of inaccurate data — the CRA must investigate within 28 days
• Add a notice of correction (up to 200 words) explaining any adverse entries
• Request erasure of data that is no longer accurate or relevant (subject to lawful basis)
• Complain to the ICO (ico.org.uk) if a CRA does not handle your request correctly

In practice, the free services (ClearScore, Credit Karma, MSE Credit Club) provide far more user-friendly access to your full report than the statutory report process, but the statutory right exists as a last resort.

Frequently Asked Questions