What Is a Credit Score?

In very basic terms, your credit score is a number, ranging between 0 and 999. It is an indication of how reliable you have been in the past when paying back money you have borrowed from a bank or on something like a credit card. Understanding what a bad credit score means can also help you manage your finances better.

How Scores Work

Credit scores are generated by the major credit reference agencies, using what they already know about your financial history. Higher scores indicate lower risk to lenders. For more insights, you might want to read about what your employers see when they check your credit.

Factors Impacting Your Score

Your score is influenced by payment history, credit utilisation, length of credit history, types of credit, and recent applications. It's important to be aware of the impact of a bad credit score on your financial opportunities.

Who Holds This Information

The three main credit reference agencies in the UK are Equifax, Experian, and TransUnion. They provide information to lenders but don't make lending decisions.

Conclusion

Understanding your credit score is the first step to managing it effectively. Regular monitoring helps you take action to improve your score.