What is a credit score?

Your credit rating can be the deciding factor in whether you get that loan, credit card, mortgage or not, so it is important to know your score so that you apply for financial products for which you are likely to be accepted.

Experts recommend that you check your score before making applications for credit, or once a year. Your score is not affected by how many times you check your account, so you can check as many times as you feel you need to make sure you are confident in your credit status.

A credit score is generally a number on a scale from bad to good, with each Credit Referencing Agency employing a slightly different scale of measurement. This score shows you how your credit history and past credit transactions have affected your current financial credit standing. The score is generated from the credit report which dictates all your previous credit transactions.

A low credit score tells a lender you have handled credit badly in the past and therefore it is unlikely they will lend to you as you are high risk. If you have a high score the opposite is true, and it is likely your credit applications will be approved and you may be entitled to lower interest rates on credit products.

It is important to check your credit score regularly. See our page on CHECKING YOUR CREDIT SCORE for more information.

Your credit report is the basis for your score, and this is generated by Credit Referencing Agencies (CRA) of which there are 3 in the UK: Callcredit, Equifax, and Experian. At SearchMyCredit your score will be provided by Callcredit. Your score tells a lender how much of a risk it would be to lend to you, based on your history of repayments and borrowing as noted in your credit report.

A thin file makes it hard for a CRA to generate a score and it may be impossible to be successful in applying for certain credit products. Read our page on WHAT IS A THIN FILE? For more information.

Your credit score can be affected by many factors and this can lead to a rejection from a credit application. Read more about being REJECTED FOR CREDIT here.

In order to avoid a rejection from a credit application, these are the things that you may have on your credit history to negatively affect your score:

  • Frequent late or absent repayments
  • CCJ (Count Court Judgement)
  • Declaring Bankruptcy
  • Debt Defaults