What is a Good Credit Score?
Asking ‘what is a good credit score?’ is understandable when applying for credit or a Likely Loan. The better your credit score, the more likely it is that your application will be accepted. However, as every credit reference agency has its own different scales and scoring systems it’s impossible to pinpoint exactly what is a good credit score.
From what is an excellent credit score to those that are very poor, it will depend on the credit reference agency providing the score. For this reason, a specific numerical value cannot be pinpointed as the optimum for a good credit score.
What is a Good Credit Rating?
There are three main credit reference agencies in the UK, though each have their own scales to determine what is a good credit score:
- Experian: 881 to 960 is Good, 960 to 999 is Excellent
- Equifax: 420 to 466 is Good, 467 to 700 is Excellent
- Callcredit: 604 to 627 is Good, 628 to 710 is Excellent
The difference between what is a good credit rating and an excellent score can mean more lending options are provided or the best mortgage deals offered. Even though there is no universal credit score, each of the credit agencies use similar factors to work out how likely you are to repay a loan, though score under their own criteria.
Factors such as being on the electoral roll, failing to pay a bill on time, using less of your credit card limit and more can affect the overall credit score. For example, with Experian you lose 130 points for failing to pay a bill on time, which can knock someone down from an Excellent to a Fair rating.
What is the Average Credit Score?
In the same way that there is no universal way of working out what is considered a good credit score, it’s also hard to determine what is the average credit score overall. The UK average for the Experian credit score is 757, which actually falls into the fair rating.
Research from ClearScore has shown that the average credit score out of 700 is 380, which when applied to Equifax’s system also falls into the fair category. With a better understanding of what is a good credit score, it should make your rating clearer to work out when applying for a Likely Loan.
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