What is the Average Credit Score in the UK? [By Age, By Area]

Ever wondered how banks and lenders decide whether to approve your loan or credit card application? One crucial factor is your credit score. In the UK, everyone has a credit score that can range from poor to excellent. Lenders use these scores to assess your creditworthiness and determine how likely you are to repay what you borrow.

This article explores the average credit scores. Understanding where you stand compared to the average credit score can help you make smarter financial decisions and improve your chances of being approved for credit.

Key Takeaways:

1. Credit Score Importance: Your credit score predicts your credit behaviour, such as how reliably you’ll repay loans, based on information in your credit file.
2. Average Scores Vary: The average credit score differs among the UK’s three credit reference agencies (Experian, Equifax, and TransUnion), each using different scoring systems.
3. Impact of Your Score: There is no universal number for credit scores. A higher score increases your chances of loan or credit card approval, often with better interest rates. Managing your credit score is essential for financial wellbeing.
4. Improvement Strategies: Improving poor credit takes time but is achievable through responsible financial habits.

Average Credit Scores in the UK

In the UK, you don’t have just one credit score. Instead, the three main credit reference agencies assess your creditworthiness: Experian, Equifax, and TransUnion. Each agency maintains its own standards and methods for evaluating your credit history and borrowing history. All credit reference agencies are regulated by the Financial Conduct Authority (FCA).

The average score in the UK varies depending on which credit reference agency you check with. There is no universal number or average score that applies across all agencies.

When lenders assess your application for a loan or credit card, they typically check your credit file with at least one of these main credit reference agencies. Understanding how these agencies calculate your score can help you manage your credit more effectively.

Average Credit Score by Age group

Here’s how the average credit score breaks down by age group in the UK:

As you can see, your age group can impact your average credit score. Older people tend to have higher scores. Why? They’ve had more time to build good credit history. They’ve paid off debts. They’ve shown they can borrow wisely. The youngest age group tends to have the lowest credit scores. The older age group of above 65 have the highest average credit scores.

Your age affects your score because older people have had more time to establish a longer credit history. Lenders typically view a longer track record of responsible credit management as evidence of lower risk.

Average Credit Score by Area

The average Experian credit score also varies by location across the UK:

The City of London and Wokingham have the highest credit average scores in the UK. Areas like Blaenau Gwent, Blackpool, and Kingston upon Hull have the lowest scores on average. Why such differences? It comes down to local factors. These include the local economy, job market, and income levels in each area.

How Are Credit Scores Calculated?

How do credit reference agencies work out your score? They use many factors and math formulas. Each agency has its own system. But they all look at these key things:

• Payment history (whether you pay on time)
• Credit utilisation (how much of your available credit limit you’re using)
• Length of credit history (how long you’ve had credit accounts)
• Types of credit used (having a mix of credit cards, loans, and mortgages)
• Recent credit applications (too many in a short space of time can lower your score)
• Public records such as bankruptcies, defaults, and court judgments

The credit reference agencies collect all this data about you. They use it to create your credit score. Each agency may value certain factors more than others. This is why your score can be different with each agency.

When you apply for a loan, car finance, or a new credit card, lenders will check your credit score to determine whether you’re a reliable borrower.

Credit Score Range in the UK

There is no universal credit score in the UK. Your score will differ depending on which credit reference agency you use to check it. The scoring systems all work on a scale from low to high, with a higher score indicating you’re less of a risk to lenders.

Each agency has its own credit score bands, which categorise your score from poor to excellent:

When you compare your credit score across different credit reference agencies, you’ll see they use different ranges. Let’s look at a score of 750. With Experian, that’s just “fair.” With Equifax, it’s “good.” A TransUnion score of 650+ would be “excellent.” So always check which agency’s scale you’re using when you look at your score in the UK.

Want to keep a good credit score? Or need to boost your credit rating? Follow these simple steps:

• Pay bills on time
• Manage credit accounts well
• Keep credit use below 30% of your limit
• Don’t apply for too many cards or loans at once

Why Is Your Credit Score Important?

Your credit score reflects your financial health and ability to repay debt. It matters for several key reasons:

1. Borrowing power

A good score gives you more borrowing power. It helps you get higher credit limits. You can secure larger loans. You’ll get better interest rates too.

What about poor credit? Lenders may not offer you good terms. Your credit limit options become limited. You’ll likely pay more through higher interest rates. Over time, a good credit score can save you thousands of pounds on mortgages and loans.

2. It may affect your job applications

Some employers may ask to see your credit report when you apply for a job. This is common for roles that deal with money. Your credit score shows how you handle your own finances. Have you missed payments? Do you have defaults? These might worry potential employers.

3. It affects your ability to rent a house

Looking to rent? Landlords and letting agencies often check your credit score. A good score helps you get approved. It shows you’ll likely pay rent on time. Poor credit? You might need a guarantor. Or you might have to pay a larger deposit.

4. Lending decisions

Lenders look at your credit score when you apply for credit. Need a mortgage? Want a loan? Fancy a new credit card? A higher score means you look less risky. This boosts your chances of approval. You’ll get lower interest rates too. Over time, this saves you money.

Having a fair or poor credit rating doesn’t necessarily mean you’ll be refused credit, but you’re likely to be offered less favourable terms than someone with a good or excellent credit score.

How to Check Your Credit Score in the UK?

Checking your credit score is straightforward and won’t harm your credit rating. Here’s how:

1. Choose a Credit Reference Agency: Start with one of the three credit reference agencies: Experian, Equifax, or TransUnion.
2. Sign Up Online: Visit their websites to create an account. You can get a free credit report only once a year.
3. Use Free Services: Several free apps and websites let you check your credit score without affecting it.
4. Regular Monitoring: Your credit score updates monthly, so checking your credit regularly helps you track improvements and spot potential fraudulent activity.

Remember, when you check your own credit score, it’s recorded as a “soft search” or “soft credit check” that doesn’t impact your credit rating. Regular checking of your credit file is a good habit that allows you to monitor changes and quickly identify any issues.

How Can You Improve Your Bad Credit Score?

Improving a poor credit score takes time but is entirely possible with consistent effort. Here are effective ways to improve your credit score:

• Pay all bills and debt repayments on time
• Keep your credit utilisation below 30% of your available credit limit
• Limit new credit applications
• Register on the electoral roll at your current address
• Check your credit report for errors and dispute any inaccuracies
• Consider a credit-builder card if you have a bad credit record
• Keep old, well-managed accounts open to demonstrate a longer history

Even if you currently have bad credit, taking these steps can gradually improve your credit rating. As your score improves, you’ll have a better chance of being approved for credit cards and loans with more favourable terms.

Be wary of companies promising quick fixes to repair your credit. There are no shortcuts, improving your credit rating requires building good financial habits over time.

Credit Score Compare: How Do You Measure Up?

When you credit score compare your own rating against the UK average, remember that your score can vary significantly between agencies. The Experian score might be quite different from your Equifax score or TransUnion score.

Here’s how you might interpret your position relative to the average credit score in the UK:

• Above Average: If your score is higher than the average for your age group, you’re doing well. You likely have a good credit rating that gives you access to better financial products.
• Average: Being around the average credit score for your demographic suggests your credit management is typical. There may still be room for improvement to access lower interest rates.
• Below Average: If your score falls below the average, focus on improving your credit habits to build a stronger credit file over time.

Keep in mind that lenders look beyond just your overall score. They check the details in your credit report too. Got a fair credit score? A clean record with no missed payments can still give you a better chance with some lenders.

Final Words

The average credit score in the UK varies a lot. It depends on which of the credit agencies you check with. As our tables show, both your age group and where you live affect your average credit score.

Check your credit score often. This helps you control your financial future. A good credit score unlocks many doors. You’ll get better loan rates. You’ll have more job options. Renting will be easier too. Start tracking and boosting your credit score today.

When you’re looking to borrow money, remember that different lenders use different credit agencies and have their own criteria. If you’re turned down by one lender, you might still be accepted by another.

If you currently have poor credit but need funds, some lenders offer loans for bad credit. They offer based on other affordability criteria & not just a bad credit score. However, focusing on improving your credit score should be a priority for better financial options in the future.

FAQs

Disclaimer: We are not providing financial advice. These are informational tips to help you understand credit scores in the UK.