Should I and how can I check my Credit Score?

Last Updated on 9 July 2021 by Dan

Hello everyone! Today we’re looking at the art of the credit score – and whilst I don’t want to give away any spoilers, the answer to this one is a resounding yes!

What is my Credit Score?

A credit score is a effectively a consideration of our how we’ve handled debt in the past – namely how much debt do we have and if we’ve consistently paid it off in time. From this it forms a picture of if you’re a risk to lenders when it comes to giving you more credit.

Often this is something people think of as a literal score, generally on the basis of between 0-999. In practice the lenders are just looking at your history – the “score” is largely a marketing construction in order to provide a basis of how good or bad your position might be. You don’t actually officially have any credit score in the UK.

However the concept of a credit score quite a helpful one – it provides a very relatable measure to see if lending might see our financial health as improving or worsening.

Differences between credit rating agencies

There’s a few credit reference agencies that serve the UK and gather information on your credit profile, and these may have slightly different scores. There’s no “universal” single score, although in practice you’d hope they have the same of very similar information.

The three credit reference agencies serving the UK are Equifax, Experian and TransUnion. Just to be slightly annoying, each lender also tends to use their own scoring system (so Experian will give you a score out of 999, and TransUnion gives you a score out of 710!)

What would we expect to see on our credit score?

Here’s a few examples of what you’ve expect to see on your credit score are. Where the reasoning the credit rating agencies are asking for this information is a little more obscure, I’ve included an explanation in italics:

  • Any bank accounts you have, and the age of those accounts.
  • Any credit cards you have, and the outstanding balance of those accounts.
  • What credit limit has been offered to you on any credit cards you hold.
  • If you have a mortgage, and the outstanding balance if so.
  • If you have any personal loans, and the outstanding balance if so.
  • Any consumer credit agreements you have around utilities, such as a mobile phone contract.
  • Your address history. (Being at an address for a longer period means a greater degree of confidence all relevant agreements will be matched to you, and stability in any housing costs).
  • If you have any history of changing your legal name.
  • How long that you have been recorded as on the electoral roll (provides confirmation of the address history).
  • Any declarations of bankruptcy or county court judgements.
  • Any notices of correction to your credit report.
  • Any hard or soft searches by credit providers against your name (Multiple hard searches may concern lenders as they may show you’re looking for lots of new credit quickly, and they may wonder why. Less-intensive soft searches should not affect your credit score).
  • Any CIFA warnings against your name (this is a marker that you may be more likely to be a victim of fraudulent attempts to take credit out in your name).

Why should I check my credit score?

It’s important because when you’re looking at doing any kind of new borrowing, the lender will want to use the above information and look at your credit history to evaluate your capacity to take on additional borrowing.

Checking credit score on a glowing scoreboard

Where checking your credit score can help you

  • Checking your credit score helps provide guidance to yourself on what you might be accepted for, and your financial position: This aspect is most important when applying for some of life’s really big financial aspects like a mortgage, where you want to be absolutely sure will be accepted. Understanding your score will also give you a picture of what kind of credit cards you might be affected for or if you’ll be granted a personal loan, what and what credit limit they’ll give you if they do accept you.
  • It makes sure you can identify any errors on your report: Mistakes do occasionally happen, such or worse you can be a victim of fraud. You don’t want your dream house mortgage to be rejected because of an issue on your report. Unfortunately, a simple mistake like a slightly incorrect address can be the difference between acceptance and rejection.
  • It helps you avoid hurting your credit score with a rejection: If you apply for credit in a manner where a hard search is performed and are subsequently rejected, it can damage your credit score as it creates a record that shows a lender determined they didn’t want to lend to you, and so other lenders may question why.

How can I check my credit score for free?

If you’re looking to check out of curiosity or good financial housekeeping, I’d generally just check one provider. If I’m applying for anything serious, I would recommend checking all three providers.

How to check your TransUnion credit score

You can get a free check at Credit Karma to check your TransUnion credit rating: If you’re looking to do a basic check and just get a broad sense of your position, I recommend signing up for Credit Karma – this is a free service that will provide you with information on where your credit score sits with TransUnion’s records only.

The service scores you, provides detailed information on what is driving each element of your credit report and provides advice on what you can do to improve each section. It’s really nicely presented and quite user friendly.

The service is free, and they make their money from the fact they can link you up with products that you will be accepted for with your credit rating profile, but there’s no pressures to sign up.

How to check your Experian credit score

There are multiple options to check your Experian account: With Experian you can either sign up for a free account which does a slightly more basic version of the Credit Karma report above, or sign up for the full credit report which gives you a really details report and history.

The full report is quite expensive at £19.99 a month, but comes with a 30-day free trial. If I was looking for a basic check, I’d simply use the free report. If I was checking in advance of something like a mortgage application, I’d use the full report to build a sense but make a point of cancelling before the free trial expires, unless I really feel I have a reason where I that level of detail on an ongoing basis.

How to check your Equifax credit score

For Equifax, skip going directly and go to Clearscore instead: Whilst you can sign up directly to Equifax, their service is 30-days-free and then costs £7.95 a month. In reality you can get much of the information for free by going via Clearscore instead so I definitely recommend that as an alternative.

Again, this works in a similar way to the above services, where you’re getting the information for free to manage your position but they’re hoping to sell you related products.

How can I improve my credit score?

That topic is a meaty one and I wanted to give it the attention it deserves – so I wrote a full separate article on that which you can find here.

Any questions?

Thank you for reading! Checking and managing your credit score can be a tricky topic, but makes a real difference when it comes to those big financial decisions – so just ask in the comments below if you have any questions.

If you’re here because you’re thinking of making use of a credit card and wondering if your credit score might change if you get accepted or not, you may get some use out of our article on which credit card may be right for you.

And that’s it!

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