What is a ‘good’ credit score?

When applying for credit, a ‘good’ credit score is an important factor in being accepted.

How is a credit score calculated?

Each credit reference agency collects information about you from public records, and from lenders or other service providers. A number of factors can influence the credit scores they generate, including the amount of existing borrowing, and how well accounts are managed.

They could hold different information about you, and have their own way of scoring, but the credit reference agencies do share similar views on what constitutes a ‘good’ credit score.

Just bear in mind, lenders and service providers might do their own scoring when you apply for credit, looking at information from your credit record. They also consider other factors like affordability and any past account history.

More about credit scores and how they work

Checking your credit score and report

When you apply, lenders and service providers contact their preferred credit reference agencies to check your credit record, which will highlight any potential risks associated with offering you credit.

It’s a good idea, especially if you’re planning an application, to check the details held by each credit reference agency. If any of their information is incorrect, you could submit a data dispute to the relevant agency, so they can investigate and update their records accordingly.

The agencies used by Lloyds Bank include TransUnion, Experian and Equifax.

Check Your Credit Score with Lloyds Bank

What is considered a ‘good’ credit score?

The measurement scale used by each credit reference agency varies but, as a general rule, the higher the number, the stronger your chances are of being accepted when you make a credit application.

Maintaining a good credit score isn’t a guarantee you’ll be accepted – lenders and service providers look at other factors including affordability and any past account history – but it’s still gives you a useful impression of your financial position at any moment in time.

Below are examples from the credit reference agencies Lloyds Bank use:

Experian

Excellent

Very good

Good

Poor

Very poor

Excellent

961 - 999

Very good

881 - 960

Good

721 - 880

Poor

561 - 720

Very poor

0 - 560

Equifax

Excellent

Very good

Good

Poor

Very poor

Excellent

811 - 1000

Very good

671 - 810

Good

531 - 670

Poor

439 - 530

Very poor

0 - 438

TransUnion

Excellent

Very good

Good

Poor

Very poor

Excellent

628 - 710

Very good

604 - 627

Good

566 - 603

Poor

551 - 565

Very poor

0 - 550

How to improve your credit score

Anything you do will take time, but you could improve your credit score by:

  • Paying all bills on time – including credit repayments, utility and other household bills.
  • Managing accounts well – stay below your credit limits and try to reduce debit balances whenever possible.
  • Limiting applications – whether or not you’re accepted, ‘hard’ credit searches could impact your credit score, especially if you make a number of full applications in a short period of time.
  • Registering to vote – it may improve your credit score to be on the electoral register.

More about how to improve your credit score

What damages your credit score?

Below are just a few of the things which may impact your credit score:

  • Missed or late payments – it could help to set up automatic Direct Debit payments. If you ever find yourself experiencing financial difficulties and can’t manage your payments, lenders and service providers may be able to help.
  • How accounts are managed – lenders and service providers will report arrears, missed, late or defaulted payments, and if you go over any agreed credit limits.
  • Making lots of applications – whether or not you’re accepted, ‘hard’ credit searches could impact your credit score.
  • Not being on the electoral register – being on the electoral roll is one way your identity and home address can be confirmed.

More about what affects your credit score

What are the benefits of a good credit score?

  • The higher your credit score is, the more likely it could be that a mortgage, credit card, personal loan, overdraft or car finance application will be accepted.
  • Depending on the type of borrowing, the lowest and longest lasting interest rates might be offered to low risk applicants, who’ve shown they can manage credit responsibly over time.
  • Your credit score can also affect the amount of credit you are offered.
  • Bad credit might affect your ability to get some jobs, e.g. in legal or financial services.

Lenders also check

Details you provide

As part of a credit application you’ll be asked for some personal and financial information, which could include your address, employment status, income and regular expenditure.

Affordability

Lenders might review what you can reasonably afford to repay, based on your income, outgoings and existing borrowing.

Your account history

Lenders usually keep records about accounts you’ve held with them in the past, including information about how well they’ve been managed.

Key points about good credit scores

A good credit score should help you to access better borrowing options in future.

  • Credit reference agencies collect information from public records, lenders and other service providers. Each agency has their own rating system. A higher credit score could mean you’re more likely to be accepted when you apply for credit, although it’s not a guarantee.
  • When you apply for credit, lenders and service providers may check your credit record as part of their decision-making process.
  • The information held by each agency may vary, so it could be worth reviewing your credit scores and reports with TransUnion, Experian and Equifax.
  • You may be able to build your score, for example, by making payments on time, managing accounts well, limiting new credit applications and registering to vote.

Where next?

Know where you stand with Lloyds Bank

Sign up for ‘Your Credit Score’ to see your rating with TransUnion. It’s free to check and won’t hurt your credit score.

More about Your Credit Score