Recent figures released by one of the UK’s largest credit referencing agencies show that the average British credit score has increased in 2021, despite the pandemic causing chaos with the finances of many. Credit scores from the major agencies in the UK are on a scale of 0 being the worst through to 999 being the best achievable. In 2021, the average credit score throughout the UK was 797, up from 792 in 2020 and 776 in 2019.

Emergency Payment Freeze

At the start of the Covid-19 pandemic in 2020, many banks and other financial institutions introduced payment freezes or mortgage holidays, to help customers manage on reduced furlough payments, or those who faced losing their jobs entirely in the first lockdown. As a consequence, fewer borrowers got into difficulties making repayments on their loans. With hospitality and non-essential retail closed, many consumers also found that their spending patterns changed and that reduced commuting costs and additional costs of travelling to work meant they could cut their outgoings and reduce debt as a consequence.

Regional and Age Differences

Experian also looked at how the average UK credit score varies across the country. Perhaps unsurprisingly, the people with the highest overall average credit score are found in the city of London area, closely followed by the Isles of Scilly and Wokingham in Surrey. At the other end of the scale, the areas with the lowest average scores are Blackpool, Blaenau Gwent in South Wales, and Hull.

There is also a wide gulf between average credit scores in each age group. People over 55 years of age have the highest average scores. 18–20-year-olds perhaps surprisingly score more highly than those in their 20s, possibly because people in this bracket are more likely to be living at home, without expensive loan agreements or mortgage payments. People in the 31-35 group have the lowest average credit rating, as this is the age group most likely to take loans or a new mortgage. Experian have put together an interactive map which helps you look at your own score compared with other people of the same age, or same geographic location.

Improving Your Credit Rating

Although the industry has welcomed news of the average credit score rising year on year, experts point out that there are many steps which individuals can take to influence their own credit rating. The first step is setting up a free account with one of the many sites which helps you firstly understand the credit scoring system, and lets you track your own score over time. Keeping your credit score at a healthy level will cut stress in the long run as it will make it easier to get a new loan or mortgage agreement without the worry about having your application declined. If you identify that your score is on the low side, then start to take some steps now to improve matters before applying for a new mortgage or car loan. This could be something as simple as making sure you are registered to vote at your home address and paying off your credit card in full each month.

What Is a “Good” Credit Score Anyway?

Each lender makes its own decisions about how to lend, and a poor credit score doesn’t mean you cannot access credit. However, the industry classes scores as follows:

A perfect score may be unrealistic for many, but for most of us, there are things we can do to improve how the banks and building societies perceive us.