Our credit scores impact so many different aspects of our lives each and every day. Everything from taking out a mortgage and buying a car on finance to using a credit or store card may be recorded on your credit file, which can affect 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.
Your credit score is one of the most important numbers in your financial life. This three-digit number gives lenders a snapshot of your creditworthiness and can impact everything from loan approvals to credit card interest rates. But what exactly constitutes a “good” credit score especially in the UK market? Let’s break it down according to ClearScore one of the leading credit score providers in Britain.
Before diving into the specifics of good credit scores, it helps to understand exactly what a credit score represents. Your credit score is calculated based on your credit report, a detailed record of your borrowing and repayment history compiled by credit bureaus like Experian, Equifax, and TransUnion.
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
As you can see, the range of 690 to 719 is considered a “good” credit score according to ClearScore’s criteria. 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.)
Borrowers with good credit tend to exhibit financial prudence and reliability. Lenders can offer them more favorable interest rates and terms compared to higher-risk consumers. Those with scores in the good range likely have access to prime and super-prime borrowing options.
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?
| Score | Band |
|---|---|
| 410 – 519 | Moving on up |
| 520 – 604 | On good ground |
| 605 – 724 | Looking Bright |
| 725 + | Soaring High |
Is ClearScore a real credit score?
ClearScore is a company that helps its users access their credit scores and reports. They draw this data from Equifax, one of the country’s three major credit reference agencies (the others being 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?
We provide a score from between 0-999 and consider a ‘good’ score to be anywhere between 881 and 960, with ‘fair’ or average between 721 and 880.