What is a Good Credit Score in the UK, and How To Get One?

Your credit score not only assures the ease with which a company is likely to provide you with the desired loan, but it also builds the trust factor for the secure debt transaction methods. We often get to hear what is a good credit score, or how can we assess our situation keeping these scores in mind?

 Well, as the article unfolds, you would get most of your queries answered.

Starting with the excellent credit score, the answer is a relative one. With several credit score analyser, we get to see a varied number of good credit scores. Also, the place from where you hail too has a say in determining the rating. As far as the question, what is a good credit score in the UK is concerned, there are three mega-companies devoted to the calculation and analysis of your credit score.

The three credit reference agencies (CRAs), namely Experian, Equifax and Noddle’s, clearly answers the question of what is a good credit score in the UK. All three of them indicate the assessment of your score and thereby determining the fate of your loans and debts. 

According to the data showcased on all three of these CRS’s website, we get to see the following stats while enquiring about what is a good credit score in the UK:

• Experion states that the good credit score in the UK ranges from 700 to 800 with 800 being the excellent score.

• While Equifax showed the range starting from 660 or above

• Noddle’s best indicator shows the pointers range starting from 3+ on the scale of 1-5.

It is always advised to check all three of these scores for the better results. You can build your credit file by demanding a credit report from these CRAs every three years. The Consumer Credit Act gives you a liberty to request your statutory credit report at a subsidised cost. 

In Case of errors while tabulation of the score, you can demand the re-auditing by providing supporting evidence.

ADVANTAGES OF GOOD CREDIT SCORE

Below mentioned are few things what a good credit score in the UK is capable of providing you:

• Low Interest and Credit Card Rates: if you improve your credit score, all the best discounts and interest rates are open for you while borrowing a sum.

• Better Chances of Credit Card and Loan Approval: those who are already burdened with older loans and dues amounts are generally not given approvals for future loans and services. Hence, easy approvals are the best gifts what a good credit score in the UK could give you.

• Power of Negotiating: A good credit score gives you a credible reason to negotiate interest rates and loan amounts with the company or bank concerned.

• No Security and Utilities Deposit: with a good credit score, you can easily buy any medium of transportation as well as any commodity at zero down-payment. Some companies also give the price-discounts to some of its excellent credit score holders.

WHAT DIMINISHES YOUR CREDIT SCORES?

Here are some of the probable reasons why our credit scores get increased:

• Late Payments: A single late credit card payment or delayed interest payment alone is enough to taint your credit history and reputation.

• Minimum Payments: Your minimal payments depict your insufficiency to pay your previous debts and are capable enough to stop you from achieving what a good credit score in the UK is.

• Bankruptcy: The bankruptcy is declared when you have the lowest of credit score and forces you to enter Individual Voluntary Arrangement (IVAs).

• Lack of Financial History: Your creditworthiness is measured generally from the records of your borrowings. Hence, it is slightly tricky for first time borrowers to provide the bank or the company with sufficient financial history as a credit builder.

• Frequent Credit Application: If you’re into the habit of filing repetitive loan pleas and credit card dues sanction, the lenders might assume your situation as a financial crisis. Try limiting your applications and in case of turndowns, wait for a while and try again.

HOW TO IMPROVE CREDIT SCORES?

To improve your depreciating credit score and build your credit up to what a good credit score in the UK is, you have to follow these measures:

• Register on Electoral Roll: One of the easiest ways to improve your credit score in the UK is to get yourself enrolled in the electoral roll. The enrollment is free of cost, and it helps in building the credit factor.

• Annual Checking of Credit Card Reports: to tally your expenses and curb extra spending, always check your credit card reports. The checking can also help in making amends before the final reports.

• Consider a Credit Builder Card: the cards with higher borrowing limits offer temptation to buy more. These cards, in the long run, could be a significant threat to your credit; hence, always use credit builder card and borrow as little as possible.

• Exhibit Your Financial Stability: The most obvious step to achieve what a good credit score in the UK is by managing your loans and bills efficiently. Always pay your interests and dues on time and save yourself from further complications. 

After getting the answer to what a good credit score in the UK is and its other related queries, the next probable question would be why do we need to calculate these credit scores at all?

Checks before the loan granting

Checking your credit score is perhaps the first step towards the consideration your loan issued by the banks or some other companies. Before giving you the facilities of a good credit deal or a mortgage facility, the bank or company checks your credit background. Before moving your paperwork forward, these authorities create a report over your credit check and access your credit score given by the three CRAs in the UK. If the score meets the exact criteria of what a good credit score in the UK is, the papers are then moved forward.

A good credit score hence, means having better access to the loan granting facilities and interest rate reductions. With an authentic and hard-earned good credit, you can avail better credit card rates and discount bonuses, improved credit agreements, loans and reduced mortgage rates. Your borrowing capacity too depends upon your credit score as the score would guarantee that you can be trusted with large sums and transactions. With an excellent credit score, you can avail rental or permanent residential facilities at zero security deposits.

Your loan would still be granted if you fall below the score required, but the process would take longer time slightly, and the extra facilities would be negligible. It is because a filed credit card bill or a lapsed EMI eradicates the infant trust brewing between you and your creditors.