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9 min read

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How is Your Credit Score Calculated?

Your credit score is a number that indicates the level of risk associated with lending to you. Financial lenders can see how reliable you are at repaying money that you’ve borrowed determine your creditworthiness. Essentially, the higher your credit score the more likely it is that your loan application, credit card, or any other borrowing option will be accepted.

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How to check your credit score

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There are three main credit reference agencies (CRAs) in the UK that each holds your personal information, such as your name and address, and your financial history in credit reports. The data is used to calculate your credit score.

Each CRA has its own credit scoring system, so your credit score value may depend on the agency although you’ll probably fall into the same bad, fair, good, or excellent category across the three credit reference agencies.

  • At Equifax, your credit score is rated between 300 and 700 with any credit score over 420 considered good and any credit score over 466 considered excellent.
  • Experian calculates your credit score between 0 and 999 with any credit score over 881 considered good and any credit score over 961 considered excellent.
  • TransUnion calculates your credit score between 0 and 710 with any score over 604 considered good and any credit score over 628 considered excellent.

Request your credit file to check your credit score for free, it won’t affect your credit rating! You can receive your credit file either online or as a written copy through the Information Commissioners' Office. There are also online site partners that allow you to view your basic credit score and report for free on a 30-day trial, these include ClearScore (Equifax), MSE Credit Club (Experian) and Credit Karma (TransUnion).

Why does your credit score matter?

Your credit score matters as it can determine your ability to apply for a financial loan, a credit card, finance, or other borrowing options. It also informs lenders on how much money they should borrow you and the rate of interest placed on the repayments.

If you have a good credit score, you’re more likely to be accepted for a large loan amount at a competitive interest rate in the future. It’s important that you understand how your credit score is calculated and how to improve your credit score.

How are credit scores calculated?

As explained, credit scoring is an analysis carried out by lenders that predicts your future behaviour by providing a snapshot of your financial history and current creditworthiness. Your credit score number is calculated using a points system based on the data in your credit file.

What is included in your credit report?

  • Basic Personal Information, such as your full name, date of birth and current address.
  • Credit History such as previous loans, any outstanding debts and a record of any late or missed payments.
  • Previous Enquiries. Whenever you apply for credit or a lender or debt management company etc accesses your credit profile it leaves a footprint. If you have too many enquiries over a short time, it may look as though you’re struggling with payments and desperate for credit.
  • Public Records. If you have any previous Court County Judgements (CCJs) or have filed for bankruptcy, then this will also be evident on your credit report.

Although lenders may request the information separately, your income, student loan debt, council tax arrears, driving fines or any previous criminal records cannot be found on your credit report.

Any enquiries will stay on your credit report for up to two years, and on public records for up to six years. So, if you’ve borrowed money from a lender within the last six years and made the agreed repayments on time, you’ll likely have a good credit score that suggests you are in a position to apply for a loan and manage future debt responsibly.

How can I improve my credit score?

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There may be no quick fix, but a simple yet effective way to improve your credit score is to ensure that you always make the repayments on time and keep below your credit limit to avoid charges and appearing a risk to lenders.

It’s also important to make yearly credit file checks to make sure there are no mistakes in your information, such as a wrong address, or any signs of fraudulent activity. Remember to be vigilant and investigate anything suspicious on your credit report, for example, loan applications that weren’t made by you.

Registering to the Electoral Roll is also crucial for improving your credit score as it is the public record lenders use to check you live at your given address on the loan application. It is also advised to close any old bank accounts or cancel open credit cards that you no longer use so that the lender does not get the impression that you have other potential avenues of credit. You should also distance yourself financially from any ex-partners and previous joint accounts by requesting a ‘notice of disassociation’ be added to your credit file by the relevant credit reference agency.

Can I borrow money with a bad credit score?

If you’re concerned about bad credit and debt, then you’ve come to the right place. At Consolidation Express, we will always consider your loan application regardless of your credit score!

Our debt consolidation loan, ranging from £5,000 to £75,000 may be the best borrowing option for you if you’re struggling to make ends meet due to debts from multiple creditors and have a stable source of income to manage the repayments. By consolidating your debt into one monthly repayment from just £75, you’ll be able to manage your income better and take the first steps to improve your credit score and financial future.

Debt consolidation loans from Consolidation Express can be used to cover a wide range of expenses, including personal loans, store cards, credit cards, short term loans, utility arrears, phone bill arrears and more. To find out more about borrowing money with a bad credit score and the best way to manage your debt, contact our dedicated team of debt solution experts today on 0161 543 2720.

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Apply for a Debt Consolidation Loan

Whatever your credit score, regain control of your finances today and apply for a debt consolidation loan in three easy steps.

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Complete the short online loan application, including your personal details and how much money you’d like to borrow. It only takes 5 minutes!

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Our friendly and experienced loan advisors will soon be in touch once we’ve reviewed your application.

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If approved, you’ll receive your loan amount in your account in as little as 2 hours!

We consider all credit scores, even bad ones and pride ourselves in offering a real debt solution for real people with zero hidden upfront fees. Check out some of the stories from the people we’ve helped manage their debt and plan for a positive future.

If you have any enquiries regarding our bad credit loans or debt consolidation loans, use the contact form, or fill in our quick online application.

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