Credit can be essential for many people, but why do some people find it easier to obtain credit than others? The answer lies typically within their credit score. However, many believe there is only a good or bad credit score, but this isn’t the case.
Although high credit scores are viewed favourably, this does not mean that those with a lower credit score have no options available to them.
The following is an overview of how credit scores are generated and how credit facilities can vary depending on the score.
Credit Scores Vary Between Agencies
Many assume that all credit scores are the same, but they can vary between credit reference agencies. The following is an overview of the ranges used by credit reference agencies when determining a score.
Experian
- Fair: Between 721 and 880
- Good: Between 881 and 960
- Excellent: Between 961 and 999
Equifax
- Fair: Between 380 and 419
- Good: Between 420 and 465
- Excellent: Between 466 and 700
TransUnion
- Fair: Between 566 and 603
- Good: Between 602 and 627
- Excellent: Between 628 and 710
What Credit Facilities Are Available Based On My Credit Score?
Credit facilities are often available for all scores, but the difference can be in the amount loaned and the interest paid. For example, those with a fair credit score could still acquire a credit card, but it would have a lower credit limit and higher interest than if it was for an excellent credit score.
If your credit score falls below the ranges above, then obtaining credit could be difficult, so you must make efforts to improve your credit score and make corrections if needed.
What If I Find Incorrect Information on My Credit File?
Although it is rare for a credit score to be incorrect, there can be instances where incorrect information has been documented. If you do notice entries on your credit file you don’t recognise, then you should contact the credit reference agency as soon as possible.
In instances of fraud, a police report needs to be made, and contacting the lender ensures fraud doesn’t damage your credit score moving forward.
Fortunately, advanced efforts are in place to help minimise fraudulent applications, including liveness checks. As well as using online document verification to ensure paperwork is genuine, a liveness check will require the individual to take a photograph so additional checks can be carried out.
However, remaining vigilant when giving out information is the best way to avoid fraud and a depleted credit score. There are also services available that can send alerts when credit applications are made, allowing you to deal with any nefarious applications as soon as possible.
To see what your credit score currently is, you should obtain a credit report from all three agencies, as this will give you full context of what could be affecting your credit. It also allows you to browse all the entries and appeal to those that are unfamiliar.