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A Beginner’s Guide to Credit Scores

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

What is a good credit score?

The three 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.





 Very poor





















Credit scoring is based on predicting how likely you are to repay the credit borrowed, but what if you have never borrowed money before? Without a credit history it is very hard for lenders to forecast your borrowing behaviour and whether you can manage debt well, and it is likely that you will be considered as a high-risk customer. This may make it more difficult to be approved for credit or you may only be offered credit with a higher interest rate until you build up your credit history.

How can I check my credit score?

You have the right to access your statutory credit report from any one of the three CRAs. The report will include your credit history to date but may not give you your credit score depending on which CRA you use.

Experian and Equifax will give you your credit score as part of your credit report, however TransUnion will not. If you want a more extensive overview, including your TransUnion credit score, a third-party provider, Credit Karma offers you access to your TransUnion credit report and score free of charge for life.

Experian and Equifax offer ongoing support with your credit status for a small monthly fee. A trial period is now available for both agencies, so you can access your credit report and score for free and continue or cancel the paid subscription. You can also access your Equifax credit score and report for free through the third-party provider ClearScore.

How does borrowing money affect my credit score?

As with any financial product, borrowing money can have an impact on your credit score. Whether this impact is positive or negative, is dependent on how you use your account.

Although, a large combination of factors may impact your credit score, the top three factors you should consider before applying for a credit are your payment history, your credit limit and number of hard enquiries.

Hard enquiries

Every time you apply for a credit, the lender will review your credit history as part of their decision-making process. This review appears on your credit report and may influence your credit score. Applying for several credits in a short period of time may have a negative impact.

Payment history

Payment history can be the most important factor contributing to your credit score, as lenders want to see clear evidence that you are a conscientious borrower with the ability to repay. To demonstrate financial responsibility, you must pay the money lent to you by the credit institution on time. Missed payments may have a severe impact on your credit worthiness and affect future credit decisions.

Utilizing your full credit limit

The lender will usually set a maximum credit limit for your financial circumstances. When drawing funds from the credit, your credit limit will restrict the amount you can borrow. It may be tempting to use all the available credit due to ease of access; however, you should be aware that your credit utilization ratio may account for a large proportion of your credit score and may have a significant impact on it. In order to keep a high credit score, it is important to be a responsible borrower and only use what you need.

How does my credit score affect my application with Polar Credit?

We understand that not everything always goes according to plan and you may have missed payments or even have past defaults on your credit file. We use our proprietary technology to consider a variety of factors which go beyond just looking at your credit score to understand your application. Our 100% online application process gives you an immediate decision and tells you your credit limit straightaway.

We consider the present and understand that most people have valid reasons for missing their payments in the past and it does not mean that they are no longer creditworthy. We know that access to credit is important. Our bad credit loan alternative helps people, who may not qualify for a loan from a bank, borrow money without needing a guarantor or having to pay the high interest rates associated with payday lending. Find out more about our application process.

More information

What is Polar Credit?

What are the application criteria for a Polar Credit Line?

How do I apply?

More questions? Check out our FAQs or Contact us

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Representative Example: Amount of credit: £1200, interest rate: 49.9% pa (variable) and 1.65% transaction fee. Representative 68.7% APR (variable)

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