A Guide to Credit Scores

Last Reviewed: 10th November 2026

A credit score is a statistical number used to evaluate your creditworthiness in relation to your historic ability and responsibility of repaying debt.

Your credit score reflects factors such as your borrowing history, repayment behaviour and how you manage existing credit commitments.

Whether you are applying for a credit line, credit card, personal loan, mortgage or other form of borrowing, your credit history can influence the options available to you. A stronger credit profile may improve your chances of being accepted for certain products, while a limited or poor credit history can make borrowing more difficult or expensive.

However, your credit score is not the only factor lenders consider, and having a lower score does not automatically mean you will be refused credit. FCA regulated lenders are required to carry out a reasonable assessment of creditworthiness and affordability before accepting a new credit application. It is also important that you only submit an application for credit if you are sure that you can afford the repayments.

In this guide, we explain how credit scores work in the UK, what can cause your score to change, how to check your credit report and practical steps you can take to build a healthier credit history over time.

What is a Credit Score?

A credit score is a numerical assessment generated by a credit reference agency (CRA) using information from your credit report. Your credit report contains information about your financial history, including certain credit accounts, repayment records, outstanding balances and applications for credit.

Lenders use information from credit reference agencies alongside their own criteria when deciding whether to offer you credit.

It is important to understand that there is no single universal credit score in the UK. Different credit reference agencies use different scoring systems, and individual lenders may use their own assessments when reviewing applications.

This means you could have a good score with one agency and a different rating with another.

What is the Difference Between a Credit Score and a Credit Report?

Although the terms are often used together, they mean different things.

• Credit report: A record of information about your borrowing and repayment history, including credit accounts, outstanding balances, payment records and certain public records.
• Credit score: A number calculated from information in your credit report to provide an indication of your creditworthiness.

Your credit report is particularly important because lenders may assess the underlying information rather than relying on the score you see through a consumer credit-checking service.

What is a good credit score in the UK?

The three main Credit Reference Agencies (CRAs) in the UK, Experian, TransUnion and Equifax, all use different ranges to assess your credit score, but generally the higher the score is, the more creditworthy you are considered.

Score bandings are correct as of 10th November 2026 but are subject to change.

Generally, a higher score indicates a stronger credit profile within that agency's scoring system. Credit reference agencies also use categories such as low, fair, good and excellent, although the boundaries between these categories differ too.

Credit score numbers are not directly comparable between agencies. For example, a score of 650 is a ‘fair’ rating according to Experian and TransUnion but a ‘good’ rating with Equifax. Remember that your score may have a different meaning depending on which agency provided it.

For the most accurate interpretation of your score, check the rating and explanation provided by the relevant agency.

Does a Good Credit Score Guarantee Approval?

No. Even if you have an excellent credit score, a lender may decline your application.

This is because lenders consider several factors when assessing affordability and creditworthiness, including:

• Your income and employment circumstances.
• Your existing borrowing and financial commitments.
• Your repayment history.
• The amount of credit you are requesting.
• Information supplied in your application.
• Their own lending and affordability criteria.

Similarly, having a bad credit score does not necessarily mean you will be rejected by every lender. Some providers assess applications using a broader range of information rather than relying on credit scores alone.

How Can I Check My Credit Score?

Checking your credit score and credit report can help you understand your financial position and identify any information that may need attention.

In the UK, you have the right to request a free statutory credit report from each of the three main credit reference agencies.

You can also use services that provide ongoing access to your credit information.

Experian

Experian offers access to credit information and scoring services.

You can request your statutory credit report or explore the free and paid services available through Experian.

Equifax

Equifax provides statutory credit reports and credit monitoring services.

You can also access Equifax credit information through ClearScore, which offers a free credit report and score service.

TransUnion

TransUnion is another major UK credit reference agency.

Its credit information is available through services such as Credit Karma, which provides free access to credit reports and scores.

Should You Check All Three Credit Reports?

To get the fullest picture of your credit report, it is worth checking your information with all three agencies because they may hold slightly different records. Not every lender reports information to every credit reference agency, so an account may appear on one report but not another.

Checking your own credit report is normally recorded as a soft search and does not negatively affect your credit score. You should also review your reports periodically to make sure your personal information and account details are accurate.

What Factors Affect Your Credit Score?

Your credit score can change over time as information in your credit report is updated.

Although each credit reference agency uses its own scoring model, several common factors can influence your credit profile.

1. Your Payment History

Your repayment history is one of the most important indicators of how you manage borrowing. Making payments on time demonstrates that you are meeting your financial commitments.

On the other hand, missed or late payments can suggest that you have experienced difficulty managing your borrowing and may negatively affect your credit score.

Payment information may be reported for products such as:

• Credit cards.
• Personal loans.
• Mortgages.
• Certain mobile phone contracts.
• Some broadband and other credit agreements.
• Overdrafts and other forms of borrowing.

Not every provider reports payment information in the same way, so the accounts appearing on your credit report may vary.

2. Credit Utilisation

Credit utilisation refers to the proportion of your available revolving credit that you are currently using.

For example, if you have a credit card with a £1,000 limit and an outstanding balance of £300, your credit utilisation is 30%.

Credit utilisation calculation:

Outstanding balance ÷ Available credit limit × 100

Using a large proportion of your available credit may indicate greater reliance on borrowing and could affect your credit score. Keeping balances manageable and avoiding regularly reaching your credit limit can help demonstrate responsible borrowing.

You may have heard recommendations to keep credit utilisation below 30%. While this can be a useful general guideline, there is no universal threshold that guarantees a particular score or lending decision. The most important consideration is that your borrowing remains affordable and manageable.

3. Credit Applications and Hard Searches

When you apply for credit, a lender may carry out a credit check.

There are two main types of credit search.

Soft credit searches

Soft searches are generally used for purposes such as checking your own credit report, identity verification and certain eligibility assessments.

They do not affect your credit score and are not visible to other lenders in the same way as hard searches.

Hard credit searches

Hard searches are commonly carried out when you formally apply for credit.

They are recorded on your credit report and may be visible to other lenders.

A single hard search does not necessarily have a significant effect, but several applications within a short period could influence your credit score and how lenders assess your circumstances.

Where available, using an eligibility checker before applying can help you explore potential options without immediately submitting a full application.

4. Your Existing Credit Accounts

The number and type of credit accounts you hold can influence your credit profile.

Having a history of managing accounts responsibly may provide useful evidence of your repayment behaviour.

However, opening multiple accounts does not automatically improve your score, and borrowing more money purely to build credit is not advisable.

5. Your Credit History

The length and consistency of your borrowing history can also be relevant. For example, a long-standing account with a record of on-time repayments may provide evidence of responsible credit management.

However, having a long credit history does not guarantee a good score if your recent repayment behaviour has been poor.

6. Public Records and Financial Associations

Certain public records can appear on your credit report, including County Court Judgments (CCJs), insolvency arrangements and bankruptcies.

Your credit report may also include financial associations with people you have shared certain financial products with, such as a joint loan or mortgage.

These details can influence how lenders assess your creditworthiness.

Why Has My Credit Score Dropped?

Discovering that your credit score has fallen can be concerning, particularly if you are planning to apply for credit.

However, credit scores can fluctuate for several reasons, and a small change does not necessarily mean there is a serious problem.

Here are five common reasons your credit score may have decreased.

1. You've Recently Applied for New Credit

When you apply for a credit card, loan or other credit product, the lender may carry out a hard credit search.

One application may have a relatively small effect, but several hard searches within a short period could have a greater impact.

If you have recently applied for multiple credit products, consider allowing time between further applications and checking whether eligibility assessments are available.

2. You Have Closed a Credit Account

Closing a credit card or another revolving credit account may affect your overall credit utilisation.

For example, imagine you have two credit cards with combined limits of £4,000 and an outstanding balance of £1,000.

Your overall credit utilisation would be 25%.

If you close an unused card with a £2,000 limit, your available credit falls to £2,000, increasing your overall utilisation to 50%, even though your outstanding borrowing has not changed.

However, this does not mean you should keep every account open.

If an account has fees, encourages unnecessary spending or is no longer appropriate for your circumstances, closing it may still be the sensible financial decision.

3. You have Missed or Made a Late Payment

Missing a repayment can result in negative information being added to your credit report. Depending on the circumstances, even one missed payment may affect your credit score. If you realise you have missed a payment, contact your lender promptly and make arrangements to bring the account up to date.

4. Your Credit Limit Has Decreased

A reduction in your available credit limit can increase your credit utilisation percentage.

For example, if your outstanding balance remains at £500 but your limit decreases from £2,000 to £1,000, your utilisation increases from 25% to 50%.

This may influence your credit score, even if you have not made any additional purchases. However, a lower limit may still be appropriate if it helps you manage borrowing more comfortably.

5. You Have Reached or Nearly Reached Your Credit Limit

Regularly using most or all of your available credit can suggest greater financial pressure.

If you are frequently close to your limit, consider whether you can reduce your outstanding balance or review your spending. If you are finding it difficult to manage repayments, seeking financial support may be more beneficial than requesting additional borrowing.

How Do Late Payments Affect Your Credit Score?

Late and missed payments can negatively affect your credit score, particularly when they are reported to credit reference agencies.

The impact will depend on factors such as the account involved, how late the payment is and your wider credit history.

How Long Do Late Payments Stay on Your Credit Report?

In the UK, recorded missed payments and other negative account information can generally remain on your credit report for up to seven years.

This means a missed payment may continue to influence lending decisions even after you have brought the account up to date. The impact of older information may change over time as you establish a more recent record of responsible borrowing.

Can You Remove a Late Payment From Your Credit Report?

If a late payment has been reported accurately, you generally cannot have it removed simply because you have subsequently repaid the amount owed.

However, if you believe the information is incorrect, you can raise a dispute with the credit reference agency and the organisation that supplied the information.

For example, you may wish to challenge an entry if:

• A payment was incorrectly recorded as missed.
• The account does not belong to you.
• The amount outstanding is inaccurate.
• The account information has not been updated correctly.

Keep copies of any relevant bank statements, payment confirmations or correspondence to support your dispute.

If the information is accurate but you believe there are circumstances that should be explained, you may be able to request that a Notice of Correction is added to your credit report.

How Can You Avoid Missing Payments?

There are several practical ways to reduce the risk of late repayments:

• Set up Direct Debits where appropriate.
• Use calendar reminders for payment dates.
• Keep track of your outstanding balances.
• Check that sufficient funds are available before payments are collected.
• Review your budget regularly.
• Contact your lender early if you expect difficulty making a repayment.

If you are struggling with existing borrowing, take a look at our budgeting guide or reach out for free debt advice from independent organisations such as StepChange, Citizens Advice and MoneyHelper.

How to Build Credit From Scratch in the UK

If you have never borrowed money before, you may have a limited credit history.

Although having no debt can be financially positive, a lack of borrowing history means lenders may have less information about how you manage repayments.

This is sometimes referred to as having a thin credit file.

There are several steps you can take to establish a credit history without taking on unnecessary borrowing.

1. Open and Maintain a Bank Account

Having a bank account can support your financial organisation and help you manage regular income and expenses. Keep your personal information up to date and make sure any overdraft or other credit facilities are managed responsibly.

Simply opening a current account does not guarantee an improved credit score, but maintaining accurate financial records and avoiding unpaid borrowing can be helpful.

2. Register on the Electoral Roll

If you are eligible, registering to vote at your current address can help credit reference agencies verify your identity and address.

This can be particularly useful if you have recently moved home or have a limited credit history.

You can register through the official GOV.UK electoral registration service.

3. Consider Whether a Credit-Building Product is Suitable

Some people choose to use a credit-building card to establish a repayment history.

These cards are generally designed for people with limited or poor credit histories and may offer lower credit limits and/ or higher interest rates than some mainstream lenders.

Using a credit-building card for affordable purchases and repaying the balance on time can help demonstrate responsible borrowing. However, credit-building cards may have relatively high interest rates, and missed payments can negatively affect your credit history.

You should only consider applying if the product is suitable for your circumstances and you can afford the repayments.

Find out more in our dedicated guide to credit builder cards, including how they work and what to consider before applying.

4. Make Regular Payments on Time

Paying bills and credit commitments on time can help establish a positive repayment history where the provider reports this information to credit reference agencies.

Direct Debits and payment reminders can help you stay organised. However, not all regular bills contribute directly to your credit score, so check which accounts appear on your report.

5. Be Patient and Consistent

Building a credit history takes time. There is no guaranteed timeframe for improving your score, and the results will depend on your individual circumstances and the information held by credit reference agencies.

Rather than applying for several products in quick succession, focus on managing existing commitments responsibly and checking your credit report periodically.

Does Buy Now Pay Later Affect Your Credit Score?

Buy Now Pay Later (BNPL) services allow customers to spread the cost of purchases over several instalments, often without interest if payments are made according to the agreement.

Providers such as Klarna offer different payment options, although their terms, eligibility requirements and credit reporting practices can vary.

Does BNPL Appear on Your Credit Report?

Some BNPL providers share account and repayment information with credit reference agencies.

Whether a particular BNPL agreement appears on your report depends on the provider, the product and the credit reference agency involved.

Information reported may include:

• The amount borrowed.
• The repayment arrangement.
• Outstanding balances.
• Payment history.
• Missed or overdue payments.

Not all BNPL products are reported or treated in the same way.

Can BNPL Improve Your Credit Score?

Making BNPL repayments on time does not automatically improve your credit score.

Even where information appears on your credit report, it may not be included in the consumer score calculated by a particular agency.

However, lenders may consider available BNPL information as part of their wider affordability or creditworthiness assessments.

Can Missing BNPL Payments Damage Your Credit History?

Missing BNPL repayments can have financial consequences. Depending on the agreement, you may face late payment charges, debt collection activity or negative information being recorded on your credit report.

Before using BNPL, make sure you understand the repayment schedule and can afford the instalments alongside your other financial commitments.

Using several BNPL arrangements simultaneously can make it harder to keep track of your total spending.

How Long Does it Take to Improve Your Credit Score?

There is no fixed amount of time required to improve a credit score.

Some changes, such as correcting inaccurate information or reducing outstanding balances, may be reflected after the relevant records are updated.

Other improvements, particularly those involving a history of missed repayments, can take considerably longer.

Credit reference agencies receive updates from lenders at different intervals, so changes may not appear immediately. The most useful approach is to focus on consistent financial habits rather than expecting a particular score increase within a set timeframe.

How Does My Credit Score Affect My Application With Polar Credit?

At Polar Credit, we understand that financial circumstances can change and that some applicants may have experienced missed payments or other difficulties in the past.

Your credit score is one consideration when applying for borrowing, but it is not the only factor used to assess an application.

As a direct lender, Polar Credit considers a range of information when reviewing applications, including creditworthiness and affordability.

Our credit line is a form of revolving credit that allows approved customers to request funds within an agreed limit, subject to the terms of their agreement.

All applications are assessed individually, and approval is not guaranteed.

If you have a less favourable credit history, you can explore our information about bad credit loans and the factors lenders may consider.

You can also learn about payday loan alternatives and how different borrowing arrangements compare.

Before applying for any credit product, make sure you understand the costs, repayment obligations and whether the borrowing is affordable for your circumstances.

Understanding Your Credit Score: Key Takeaways

Your credit score can provide a useful indication of your creditworthiness, but it does not tell the whole story of your financial circumstances.

Different credit reference agencies use different scoring systems, and lenders assess applications using their own criteria.

The most important steps you can take are to understand your credit report, make repayments on time, manage existing borrowing responsibly and avoid taking on credit you cannot afford.

If you are starting with little or no credit history, building a positive record can take time. Products such as credit-building cards may be appropriate for some people, but they are not essential for everyone and should only be considered where affordable.

By reviewing your credit information regularly and developing consistent financial habits, you can take greater control of your credit profile over time.

More Information

• Credit Builder Cards
• Credit Cards Explained
• Credit Cards for Bad Credit
• What Are the Application Criteria for a Polar Credit Line?
• How Do I Apply?

For further information about our products and application process, visit our FAQs or contact us.