What is a Bad Credit Score?

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Your credit score is a number that lenders consider when they’re deciding whether to lend you money, such as a loan or mortgage. But what’s considered a bad credit score? And how does a bad score affect you? Let’s take a look. 

How do you know if you have a bad credit score?

There’s no such thing as a ‘universal’ credit score in the UK, so there’s no one number that means you have a bad credit score. The UK’s three main credit reference agencies – Equifax, Experian and TransUnion – each score people a little differently, so here’s what’s considered a poor credit score for each one. 

What is a bad Equifax score?

Equifax gives customers a score from 0 to 1000.

  • It’s a bad Equifax rating if you score from 0 to 438.
  • A score over 531 is considered a good credit score.
  • Anything over 671 is very good.
  • Scores over 811 are excellent.

What is a poor Experian score?

Experian scores customers from 0 to 999.

  • Scores from 0 to 560 are considered very poor.
  • A poor score is anything between 561 and 720.
  • A good Experian score is between 881 and 960.
  • Scores over 961 are considered excellent.

What is a bad TransUnion score?

TransUnion gives people a score from 0 to 710.

  • A very poor score is anything from 0 to 550.
  • It’s a poor rating if your score is between 551 and 565.
  • A good credit score is anything between 604 and 627
  • An excellent score is anything over 628.

How can you improve a bad credit score?

Are you unhappy with your credit score? Here are some ways you can boost a bad credit score.

Check your credit report

Check your credit file for anything that might be causing your low score. Look for errors, especially if you’ve just made a significant change like moving house. Maybe you haven’t updated your details with the UK electoral register since your move, which can lower your credit rating. You can boost your score by updating your details on the electoral roll.

If there’s a more significant blip in your file (e.g. multiple missed repayments), don’t panic. Although your score might be on the lower side just now, it’s an evolving number and you can improve your rating over time by following some of the other tips in this list! 

Don’t apply for credit unless you need it

Applying for credit such as a new credit card or mortgage leaves an inquiry or ‘mark’ on your credit file. In the short term, these inquiries lower your credit rating.

Don’t apply for a new financial product unless you need it, and try to only apply for credit cards or loans you could be eligible for.

Keep up repayments

Your payment history impacts your credit score. So, if you don’t pay your bills on time or you miss repayments, your credit rating will be affected.

Always prioritise paying your bills, including credit card bills and loan repayments, on time. Budget every month to cover these outgoings before spending money on non-essentials. 

Pay down your debt

Your credit utilisation ratio measures the difference between how much credit you’re using and how much credit you’ve been granted by lenders.

You can boost your credit score by improving this ratio. So, for example, try to pay down credit card balances (or clear them in full each month) and continue to make any outstanding loan repayments.  

Build a credit history

You might have a poor credit score if you don’t have much credit history. If this is the case, consider applying for a credit card for bad credit. By using the card responsibly and making payments on time, you can start building your credit history. 

Check out our guide to credit cards for bad credit to learn more about comparing cards and improving your credit score.