Our credit scores impact so many different aspects of our lives each and every day. Your credit file may show that you got a mortgage, financed a car, used a credit card, or bought something on credit. All of these things can hurt your credit score.
But how does your own credit score compare to the scores of others? Find out how your financial health stacks up against the rest of the nations in this guide showing the average credit scores in the UK.
In terms of money, your credit score is one of the most important numbers. This three-digit number tells lenders about your creditworthiness and can affect everything from whether you get a loan to the interest rate on your credit card. But what does a “good” credit score really mean, especially in the UK market? Let’s look at what ClearScore, one of the biggest credit score companies in the UK, says.
Before getting into the specifics of what makes a credit score good, it’s helpful to know what a credit score is. Your credit score is based on your credit report, which is a detailed record of all the loans you’ve taken out and paid back. Credit bureaus like Experian, Equifax, and TransUnion put together your report.
Lenders report your credit information to these bureaus, including when you open accounts, make payments (or miss payments), max out credit cards, and more. The credit bureaus then assign a numerical score from 0 to 700+ based on this information. The higher your score, the lower your perceived credit risk.
In the UK, ClearScore provides free access to your Experian-based credit score. This ranges from 0 to 700, helping you understand how lenders view your creditworthiness. Monitoring your ClearScore and taking steps to improve it can open doors to better loan terms, credit card offers, and other financial opportunities.
ClearScore’s Credit Score Bands
According to ClearScore credit scores fall into the following bands
- 0 – 559: Very Poor
- 560 – 629: Poor
- 630 – 689: Fair
- 690 – 719: Good
- 720+: Excellent
From what you can see, a credit score between 690 and 719 is considered “good” by ClearScore. But why does this specific range denote good credit health?.
What Constitutes a Good Credit Score?
A credit score of 690 to 719 signifies to lenders that you are a relatively low-risk borrower who pays bills on time and manages credit responsibly. While not perfect, your credit history suggests you can handle debt obligations without excessive risk of default.
Specifically, a good credit score indicates:
- A long credit history with several open accounts in good standing
- Moderate amounts of debt that are well-managed
- Few or no missed payments and defaults
- Little recent credit activity indicating stability
- A diverse mix of credit types (mortgages, credit cards, personal loans, etc.)
People who have good credit tend to be responsible with their money and reliable. Lenders can give them better interest rates and terms than people who are a bigger risk to default. People with scores in the “good” range can probably get prime and super-prime loans.
Factors That Influence Your Credit Score
Several factors shape your overall credit score. Monitoring these variables can help you pinpoint areas to focus on for credit score improvement:
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Payment history – Making consistent and on-time payments is the most influential factor, accounting for a whopping 35% impact on your score. Late payments can seriously hurt your credit standing.
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Credit utilization – This measures how much of your available credit you’re actually using. Experts recommend keeping your credit utilization below 30%.
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Credit history length – In general, the longer your credit history, the better. Having several long-standing accounts demonstrates stability.
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New credit – Opening many new accounts in a short timeframe can negatively impact your score.
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Credit mix – Having a variety of account types can benefit your credit diversity.
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Hard inquiries – Too many hard credit checks from loan/card applications may indicate risk to lenders.
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Public records – Bankruptcies, tax liens, judgments, and collections can devastate your credit score.
By being aware of these factors, you can make strategic decisions to build and protect your credit.
Perks of Good Credit According to ClearScore
The benefits of cultivating a “good” credit score of 690-719 are numerous. According to ClearScore, borrowers in this credit tier can enjoy advantages like:
- Higher approval odds for credit cards and loans
- Lower interest rates, saving substantially on borrowing costs
- Larger credit limits and borrowing power
- Access to the most competitive prime credit offers
- Easier approval for rental housing applications
- Potentially lower insurance premiums (depending on provider)
- Perks like no security deposits for utilities
Good credit unlocks convenience and flexibility in your finances. You have more options, leverage, bargaining power and freedom to make optimal borrowing decisions. Investing in your credit score pays valuable dividends.
Risks of Bad Credit According to ClearScore
On the flip side, bad credit can be extremely limiting and expensive. ClearScore categorizes credit scores below 630 as poor or very poor, signaling high risk to lenders. If your credit score falls into these unfavorable ranges, you may struggle with:
- Very low approval odds for credit or loans
- Sky-high interest rates if approved, costing more in interest
- Small credit limits or need to pay deposits/collateral
- Only access to subprime lenders and predatory terms
- Difficulty securing rental approvals or utilities
- Potentially higher insurance rates in some cases
Bad credit reduces your flexibility and increases borrowing costs substantially. It’s important to understand your credit standing and take corrective actions if needed.
How to Improve Your Credit Score According to ClearScore
If your credit score is not yet in the “good” zone, take heart. Scores are fluid, so responsible financial habits can boost your credit over time. ClearScore recommends several score-building strategies:
- Make all payments on time each month
- Keep balances low on credit cards
- Limit new credit applications and hard inquiries
- Build credit history by keeping old accounts open
- Correct any errors on your credit report
- Consider secured cards to add positive information
- Only take on debt you can realistically repay
- Seek credit counseling if struggling with debt
With consistent effort and financial prudence, you can turn your credit situation around. Patience and diligence are critical, but the long-term rewards of good credit are well worth it.
The Takeaway on Good Credit Scores in the UK
While people often focus on the numerical score itself, remember that high credit scores simply reflect healthy borrowing and money management habits over time. Aim to build those good financial practices, and your credit score will gradually improve as a result.
According to ClearScore’s criteria, UK credit scores in the 690-719 range qualify as “good” based on lower perceived risk. But no matter your starting point, responsible credit behavior makes scoring well within reach. Monitor your ClearScore, focus on positive changes, and you’ll be leveraging the power of good credit before you know it.
The UK locations with the highest average credit scores
At the other end of the spectrum, the UK locations with the highest credit scores according to Experian are:
- City of London – 893
- Isles of Scilly – 886
- Wokingham – 880
- Chiltern – 879
- Elmbridge – 872
- Hart – 872
- Waverley – 871
- St Albans – 871
- South Cambridgeshire – 869
- Brentwood – 850
You can find the average credit score for your region using Experian’s interactive online tool.
What are your options if you have a below-average credit score?
Generally speaking, you are likely to find applying for a loan or credit card easier if you have a higher score. This is because a good credit score indicates that you may be a more reliable borrower. Because of this, you may be offered higher credit limits or a slightly better interest rate.
It’s important to know that credit score isn’t the only factor that a lender considers. When you make a finance application, a lender may use a credit check to look at your financial circumstances. They will also consider your income, address history, and may also look at your credit file to decide whether to offer you finance.
If your credit report shows little credit history or a credit score below the average for your age group or location, you might want to explore how to improve your credit score.
That being said, even if you do have a lower credit score (i.e. a ‘poor’ or ‘bad’ credit score) or no credit history, there are still ways to get credit.
If you’re looking for vehicle finance, you may need to use a specialist direct lender like Moneybarn. We help thousands of people up and down the UK get the bad credit car finance they need. We’re proud to have over 30 years of experience helping people with no credit history, poor credit scores, and who have been refused credit by mainstream lenders.
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Try out our online car finance calculator to see how much your monthly repayments might be based on the amount you want to borrow.
What Is A Good Credit Score ClearScore? – CreditGuide360.com
FAQ
What is a good credit score with ClearScore?
What is my ClearScore credit score out of?ScoreBand410 – 519Moving on up520 – 604On good ground605 – 724Looking Bright725 +Soaring High.
Is ClearScore a real credit score?
ClearScore is a company that helps its users access their credit scores and reports. This information comes from Equifax, which is one of the three main credit bureaus in the country (the other two are Experian and TransUnion).
What is a good UK credit score?
A credit score of 721-880 is considered fair. A score of 881-960 is considered good. A score of 961-999 is considered excellent (reference: https://www. experian. co. uk/consumer/guides/good-credit-score. html). TransUnion (formerly Callcredit) is the UK’s second largest CRA, and has scores ranging from 0-710.
Is 700 out of 1000 a good credit score?
Our scale goes from 0 to 999, and a score between 881 and 960 is considered “good.” A score between 721 and 880 is considered “fair.”