Are you planning on applying for a credit card, a loan or a mortgage? Your credit score significantly affects your chances of being accepted and the rates available to you. Money lenders look at your credit score to get an idea of how you have managed credit in the past and predict how you will cope if they give you extra credit on top.

The UK has three independent credit reference agencies, each with slightly different criteria and scoring systems. Based on your credit history, you could be given a score from 0-999, 0-710 or 0-700, with a higher number always being more positive.

Each milestone number within the scores brings new benefits and opportunities. The average UK credit score has been on the rise in recent years — but what does yours say about you, and how does it affect your prospects?
Having no credit score doesn’t mean you’ve mishandled debt — you’ve avoided it altogether. While this is positive, it makes it more difficult for lenders to assess your ability to handle credit when you apply, as they have nothing to go off.

Consider your financial options and find a way of building credit that works for you.

Below average

If your score is low, your story isn’t a good one. A low score suggests you’re in extreme financial difficulty — such as bankruptcy — and that you’re a risky person to lend money to. This means you’re unlikely to be accepted for most types of credit, or you’ll face high-interest rates if you are.

It is possible to improve your credit score, so it’s time to make an earnest money management plan. Speak to a professional if you can.
Average With an average credit score, things could be much worse, but lenders will still treat you with suspicion. An average score indicates that you’ve had problems with money and could easily have them again in the future.

At this stage, it is worth holding off applying for credit and trying to build your credit score to increase your opportunities. Request a free credit report to look for areas you can make quick improvements.

Good Keep going; you’re almost there! A good credit score tells lenders you have a history of dealing with credit well and that you’re unlikely to default on any repayments in the future.

However, there’s still room for improvement, and just a little work could bring you extra rewards. This could mean setting up automatic payments to make sure you’re paying your bills on time or avoiding getting so close to your available credit limit.

Excellent Congratulations — you’re a money lender’s best friend. You have various existing credit accounts and handled them flawlessly, making you a safe bet for new credit in the future.

You’ll get the best credit card deals, the lowest interest rates and a great chance of securing a mortgage. You could even bag better car insurance rates and improve your job prospects — just make sure you keep it up to prevent your score from dropping.