What is a Credit Score?

What is a credit score and what does it mean? Learn how credit scores work in the UK, what affects them, and how they impact your ability to get credit.

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Written by Hayley Bevan and Victoria Smith

Published on March 19th, 2026

Last reviewed on March 19th, 2026

6 mins read

Understanding credit cards

A credit score is a number that shows how well you’ve managed credit in the past. It’s calculated by credit reference agencies and used by lenders to gauge your creditworthiness when applying for financial products such as loans, car finance, and mortgages.

Even if your current credit score isn’t where you want it to be, it’s reassuring to know that nothing is permanent when it comes to credit. By following the right habits, things can slowly start to improve over time and open doors to other opportunities.

How does a credit score work?

A credit score is calculated using information from your credit report to determine the level of risk in lending to you. Each credit reference agency calculates a score differently based on a range of factors, including:

payment history to track your record of making or missing payments.
current borrowing to attain your level of debt on existing loans and/or credit cards.
public records (such as county court judgements (CCJs) and bankruptcy) to identify signs of financial difficulty.
previous credit applications to determine your potential dependency on credit.

After a credit reference agency has reviewed all the information in your credit report, they will calculate a credit score to determine your overall credit rating – be it excellent, good, fair, poor, or very poor.

Each credit reference agency uses different calculations, so there’s no such thing as a universal score. As well as using different score scales, they also apply different weightings to different factors which has a direct impact on the outcome. It’s also the case they might not get the same level of information from the same lender.

Who calculates your credit score in the UK?

There are three main credit reference agencies who calculate scores in the UK. Each one using different score scales and ratings to determine your overall score. These are:

Experian

Excellent: 1,121 – 1,250
Very good: 1,001 – 1,120
Good: 861 – 1,000
Fair: 641 – 860
Low: 0 – 640

TransUnion

Excellent: 628 – 710
Good: 604 – 627
Fair: 566 – 603
Poor: 551 – 565
Very poor: 0 – 550

Equifax

Excellent: 811 – 1,000
Very good: 671 – 810
Good: 531 – 670
Fair: 439 – 530
Poor: 0 – 438

Checking your score is free. And due to varying calculations used by credit reference agencies, there’s no such thing as a single, universal score. Instead, you can have up to three.

With whichever credit reference agency you decide to use, it’s important to know that lenders will rarely report to all three when reviewing your report.

What affects your credit score?

As well as multiple credit applications, not being on the electoral roll, or defaults on your credit report (such as CCJs), there are three main factors that can negatively impact your credit score.

Payment history

Be it a utility bill or a loan for your family car, missing a payment can significantly lower your score. Any missed payment can also stay on your report for up to six years, so it’s important to stay on top of your finances.

Credit utilisation

If you continually have a high credit utilisation, lenders could infer you’re dependent on credit and a higher risk for lending. For that reason, it’s best to keep your credit healthy by maintaining a utilisation rate under 30%.

Length of credit history

Even if you rarely use an old account, it’s sometimes best to keep it open to protect the length of your credit history. Closing long-standing accounts may reduce your average account age and make it more challenging to get accepted for credit.

How lenders use your credit score

Lenders use your credit score to assess your likelihood of making repayments on time. Where a healthy score could improve your chances of approval and secure preferential interest rates, a bad score could leave you with limited options and higher rates of interest.

But a credit score isn’t the only factor lenders consider with your application. They also typically check your employment status, debt-to-income ratio (affordability), and credit utilisation. All of which are used to make an informed decision.

How your credit score affects getting an Aqua card

Where some credit cards might reject your application due to a low credit score, Aqua specialises in helping you build and improve your credit health with a credit card for bad credit.

For that reason, having a low score doesn’t automatically mean you won’t be accepted. But it could result in a lower credit limit or being subject to higher interest rates – both of which are influenced by your financial circumstances.

Should you continue to make payments on time, stay within your limit, and demonstrate responsible lending behaviour, you can slowly build your credit score and potentially be accepted for a higher credit limit. All of which are explained in our credit limit and scores FAQs.

How to check your credit score

Regularly checking your credit score is a smart move, especially if you’re planning to secure a loan. Most UK lenders (e.g. Experian, TransUnion, and Equifax) offer a free credit score check you can use as often as you like with no onward impact on your score.

To get started, choose a credit reference agency and create your account. As part of the process, you’ll need to submit basic details such as your name and address. And you may need to verify your identity by sharing a bank statement, utility bill, or information from the electoral roll.

Once everything’s submitted, you can instantly view your credit score within your online account. Depending on the credit reference agency, your score will typically update every 30 days – so it’s always worth logging in to check any movements.

As part of the process, you should also check the details held on your report are accurate. Any discrepancies with address details, incorrect late payments, or signs of suspicious account activity should be reported to your agency straightaway.

How to improve your credit score

Fixing a bad credit score doesn’t happen overnight. It takes patience, consistency, and an understanding that even the smallest changes in financial habits can have a huge influence on your score. As a starting point, here are a few ways to potentially improve your score:

Pay bills and credit cards on time.
Keep your credit utilisation below 30%.
Register on the electoral roll.
Avoid multiple applications in a short period of time.
Check your credit report for errors.
Keep older accounts open wherever feasible.

As discouraging as it might be having bad credit, it’s good to know your score isn’t permanent. By implementing the right changes, you’ll slowly be on your way to rebuilding a healthy credit score.

A credit score gives lenders a quick indication of your borrowing behaviour. The better your score, the more likely it is you’ll be accepted for credit with preferential interest rates and higher credit limits.

If you currently have a bad score, an Aqua credit-builder card could be the right next move. As part of your account, you’ll also get free expert support from Aqua Coach with hints and tips to help improve your score.

Representative 39.9% APR (variable) on Aqua Classic

Failure to make payments on time or to stay within your credit limit means that you will pay additional charges and may make obtaining credit in the future more expensive and difficult.

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