Understanding credit score ranges

You might already be familiar with the idea of what a credit score is, but might not be clear on what the different numbers you see actually mean. Credit scores are a tool used to represent your credit history and give an easy-to-understand indication of how lenders might view your creditworthiness.

Your credit report will include various information about repayments you have made, as well as outstanding loans, credit card debt, overdrafts and personal data. This information will help lenders determine whether or not to give you credit.

Where a credit score can be useful is that it gives an overall picture of the state of your credit report. As you make repayments or change how you use credit, the score will likely go up or down, giving you an ongoing idea of where you stand.

Here we answer a few of the most common questions about credit score ranges and how they can help you understand your credit history.

Why do credit score numbers vary?

Different organisations will have different ways of calculating credit scores based on the information they have about your borrowing history. They might also have access to different data, as lenders may not share their information with all credit reference agencies. So, it might be the case that one credit reference agency scores you poorly, while another score from another agency might be better. Along with a score, you will also often be given an indication of what the score means, e.g. a description from ‘poor’ to ‘excellent’. It may even be colour-coded to help you understand how good or bad the score is or, in other words, how likely you are to obtain credit or not.

Are credit scores universal?

There’s no such thing as a universal credit score, each credit score is created by lenders or credit reference agencies as a way of measuring an individual’s creditworthiness. Scores from different sources will be calculated using different formulas and criteria. They will also be rated on different scales, e.g. 1 to 1000 or 1 to 700 .This is why you might get 700 on one scale and 500 on another, even if the information provided is the same.

What is the highest credit score?

Because nobody has a universal credit score, there isn’t one specific number that represents the highest score you can get. The maximum number will depend on the system used by a particular lender or credit reference agency. Although a higher number may indicate you are more likely to be able to get credit, the final decision will depend on the lender you’re applying to.

Even a perfect score would not guarantee you getting accepted for every loan.

How can I improve my credit score?

There are many different factors that may help improve your credit score. These include making repayments on time - avoiding any late or missed payments on credit cards or phone bills. Being registered to vote, so that your personal details can be verified on the electoral register, is also a good idea.

If you already have a lot of credit, e.g. multiple cards or a large overdraft, this can signify to lenders that you are using too much credit. If you already have a large overall credit limit, they might wonder why you would need to access even more. Reviewing existing credit agreements and limiting the number of applications you make, could potentially help to improve your score.

If you’re interested in checking details of your credit history, you can get online access to your score out of 1000 and advanced credit report with the Equifax Credit Report & Score product which is free for 30 days and £14.95 monthly thereafter.

This article was updated in April 2021; all information was correct at the time of writing.