Author: Brean Horne

What is a Credit Score?

Our credit scores influence the everyday financial products and services we can access.

From credit cards, loans and mortgages to being approved for a moibile phone contract, it makes a huge difference.

Find out how credit scores work and what they mean for you below.

What is a credit score?

A credit score, or credit rating, is a three- or four-digit number that shows how reliable you are at borrowing money. It gives a snapshot of your credit history and how you have managed debt in the past.

Typically, a higher credit score increases your chances of being approved for new credit and for larger loans. That is because a high credit score suggests to lenders that you are a reliable borrower and can keep up with repayments.

And, the lower your credit score, the less likely you are to be accepted for certain products. That is because it might suggest to lenders that there is a risk you won’t repay what you borrow.

Credit scores are calculated using data from your credit report. Your credit report acts like a CV for your finances and includes details about your address history, credit history and public records, such as county court judgments.

The UK has three main credit reference agencies – Equifax, Experian and TransUnion – that collect this information to produce your credit report and credit score.

How are credit scores calculated?

Credit reference agencies use data from your credit report to calculate your credit score.

The UK’s three main credit reference agencies, Equifax, Experian and TransUnion, collect financial data for your credit report and generate a credit score.

Your credit report contains personal information and details about your borrowing history including:

  • Address history: Your current address and any previous addresses.
  • Credit history: Financial credit agreements, such as loans, credit cards, mortgages, overdrafts, mobile phone contracts, car finance and any late or missed payments.
  • Credit applications: How many applications for credit you have made, including those where you have been rejected.
  • Public records: Electoral roll information, any county court judgments (CCJs), bankruptcies or insolvencies
  • Financial ties: This includes anyone you have taken out joint credit with e.g. a joint mortgage or bank account.

Your credit report does not show information about your:

  • student loans
  • ISAs or savings accounts
  • council tax
  • employment history
  • criminal record
  • medical record
  • parking or driving fines

What is the average credit score in the UK?

Each credit reference agency has developed its own rating system for credit scores, so it is hard to pinpoint a singular average credit score for the entire UK.

This is because different lenders share your data with different credit reference agencies. For example, some lenders only report to one or two agencies while others might share your information with all three.

Currently, Equifax provides a credit score from 0 to 1,000, while Experian scores from 0 to 999 and TransUnion scores from 0 to 710.

So don’t worry If your credit score looks a little different on each credit report. The main thing to focus on is the classification of your score and what it means for each agency.

What is a good credit score?

If you are thinking about buying a home and need a mortgage or want to get a new credit card, you may be wondering if there is a good score that makes lenders more likely to approve applications.

Since each credit reference agency has its own credit rating system there is not a universal ‘good credit score.’ So what is classed as a good credit score will vary between the different agencies.

For instance, with Equifax, a good credit score starts from 531, while for Experian it is 881 and with TransUnion, it is 604.

The table below shows the classifications of a good credit score at each credit reference agency.

Equifax Experian TransUnion
Excellent 811 to 1,000 961 to 999 628 to 710
Very good 671 to 810 – –
Good 531 to 670 881 to 960 604 to 627

It is worth noting that these credit score scales are not set in stone and the thresholds can change. Think of them as a guide to give you an idea of how a lender may view your credit file.

How to check your credit score

You can check your credit score for free through online platforms that use data from the main credit reference agencies. The following platforms let you check your credit score for free:

  • ClearScore (uses Equifax data)
  • Credit Karma (uses TransUnion data)

With Experian, you can also sign up for a free account that offers a monthly view of your credit score, but you have to upgrade for a more detailed credit report or to check your score more frequently. Equifax offers a 30-day free introductory trial, but then you have to pay a monthly subscription. With TransUnion, you can access your credit score for free through Credit Karma.

Each platform provides a full credit report that includes your credit score. They also offer credit monitoring services that give monthly updates about your credit score and share tips on how to improve your credit rating.

Most free credit score platforms include eligibility checkers that calculate how likely you are to be accepted for loans and credit cards based on your credit history.

All three credit reference agencies have to offer a free statutory credit report by law. A statutory credit report doesn’t show your credit score. It gives a basic snapshot of your financial history including:

  • credit agreements
  • missed or default payments
  • electoral roll details

How to improve your credit score

There are lots of simple ways to improve your credit score and boost your chances of being approved for new credit.

A few quick ways to improve your credit score include:

  • Registering to vote: registering to vote helps lenders verify where you live which could boost your credit score.
  • Checking your credit score regularly: understanding your credit score and credit history can help you find areas to improve. It also helps you to spot mistakes or fraudulent activity that could damage your score.
  • Repaying on time: you can show lenders that you are a reliable borrower who can manage credit by keeping up with repayments.

Sometimes credit scores can take a while to improve and, in some cases, it may take a few months or more before your credit score increases.

The main thing to focus on is getting your finances on the right track by using credit responsibly and keeping up with repayments. In time, you should start to see your credit rating improve.

3 Simple Ways To Save Over £600 In 2026

Savings challenges are a great way to help you reach your financial goals. 

This could be anything from putting money away for a rainy day to building up a house deposit or even saving for a holiday.

Whether you’re completely new to saving or looking for fun ways to boost your finances, the following savings challenges could help to save over £600 in a year. 

1p daily savings challenge – save almost £670 a year

The 1p daily penny savings challenge could help you save just under £670 a year. Starting with 1p on day one, adding 2p on day two, and then 3p on day three until day 365 where £3.65 is added.

Within a year you’ll have built up £667.95, excluding any savings account interest.

£1 weekly savings challenge – save almost £1,400 a year

You could save almost £1,400 in a year using the weekly £1 savings challenge.

The challenge starts with you saving £1 in the first week, £2 in the second, £3 in the third and so on until you get to the final week when you add £52 to your savings.

By the end of the year, you’ll have pocketed £1,378, not including any interest paid on your savings. 

£5 weekly savings challenge – save £7,000 a year

This challenge works similarly to the weekly £1 savings challenge but uses multiples of 5 instead.

So, in the first week, you start by saving £5, then £10 second and £15 in the third. In week 52 you’ll add £260 to your savings pot.

The £5 weekly savings challenge is ambitious but could help you save £7,000 in just 52 weeks (excluding interest) if you’re able to commit!

Tips to help you save money

The following tips can help you keep you stick to your savings goals: 

  1. Get started:  You can start your savings journey at any time of the year. Once you have your goal and savings strategy in mind, try to get started as soon as you can.  
  1. Be consistent: The key to saving money is consistency. It often helps to start with a smaller, more manageable goal or challenge to help create a good savings habit first. Once you’re in the habit of saving, you can adjust the amount you put away and increase your savings pot over time. 
  1. Get the best savings rate: Shopping around for savings accounts that pay higher rates of interest can help your money work harder and boost your overall savings. Always read the terms and conditions of the account before applying to ensure that you can access your savings when you need to.  

4 Ways To Save Money On Food Shopping in 2023

With food prices at an all-time high, finding ways to save money at the supermarket is becoming evermore important. 

Whether you hit the supermarkets in person or do your food shopping online, there are simple tricks that can help you save money on your grocery bill. 

Here are my top four tried and tested tactics to cut the cost of your food shop.

1. Plan your meals in advance

Creating a meal plan is a simple way to help you save money on food shopping.

Meal plans give you a clear idea of the items you need to buy and help you find budget-friendly options to cut the cost of your shop.

Planning your meals also helps ensure that you use all of the food you buy and avoid food waste, which can be costly.

The average UK household loses hundreds of pounds a year due to food waste alone.

So, although throwing away the odd bit of forgotten food might not seem like a lot, it adds up over time!

2. Always make a shopping list

Be prepared with a list before shopping for food. Whether it’s a full shop or you just need to pick up a few items, having a list could help you save money. 

It only takes a few moments and you can jot down the items you need in your notes app or on a piece of paper. 

Taking the time to make a shopping list gives you a clear idea of what you need to buy. It also helps you to stick to your budget. 

Having a food shopping list lowers the chances of you making impulse purchases which may lead to overspending. 

3. Use supermarket loyalty schemes to your advantage

Using supermarket loyalty schemes can help you cut the cost of your food shopping. 

Most supermarket loyalty schemes work by allowing shoppers to earn points each time they spend money in-store, online and at participating retailers. 

Once you’ve racked up enough points, you can use them to get money off of your food shopping. 

Some retailers also offer members-only discounts on products, for example, Clubcard Prices at Tesco.

While some offer you tailored discounts on items that you’re likely to buy, based on your shopping habits, for example, Nectar Prices at Sainsbury’s. 

It’s always worth signing up for multiple schemes at different supermarkets to earn rewards and maximise your food shopping savings. 

Although supermarket loyalty schemes offer a great way to save money at the checkout, remember to only buy items that you need. 

4. Avoid shopping while hungry

Studies show that you’re more likely to make impulse purchases when you shop on an empty stomach. 

This may lead to you picking up more items than you need and cause you to overspend.

Where possible, try to have a meal or snack before going into a supermarket or doing an online supermarket shop.

This will help you stick to your shopping list and make the best food choices to suit your budget. 

 

How to save £1,400 in a year

I came across a simple savings challenge which could help you save almost £1,400 in 52 weeks.

The challenge starts with you saving £1 in the first week, £2 in the second, £3 in the third and so on until you get to the final week when you add £52 to your pot.

By the end of the year you’ll have saved £1,378!

You can start this challenge at any point during the year, so don’t be put off if you don’t get going in January.

This savings challenge timetable can help you plan out how much you need to put away each week.

I’ll definitely be putting this challenge to the test this year.

Leave a comment below if you decide to take part and let me know how you get on.

Happy saving!