A credit score is a rating based on your financial history. It reflects how reliable you are when it comes to repaying money. Having a poor credit score makes it harder to borrow money and get better deals on things like credit cards, loans, mortgages and more. Find out how to tell if you have a bad credit rating, and what you can do about it.
What is classed as a bad credit score?
When it comes to your Experian Credit Score, 561–720 is classed as Poor and 0–560 is considered Very Poor. Though remember, your credit score isn’t fixed. If your score isn’t where you’d like it to be, there’s plenty you can do to get it back into shape.
Another thing to bear in mind is that lenders and the other credit reference agencies have different ways of calculating your score. Different lenders have different views of what an ideal customer looks like to them. But Experian provides the UK’s most trusted credit rating to help you see where you stand. By knowing your score, you can get a good idea of how lenders may view you.
What is the lowest credit score possible?
The lowest possible Experian Credit Score is 0. Your score can’t be a negative number. Other credit reference agencies have different credit score ranges and may calculate your score differently.
How will a bad credit score affect me?
Your credit score reflects how lenders may see you. A bad credit score means lenders will likely see you as more of a risk, so you’ve a higher chance of being refused credit.
If lenders decide to approve you with a poor credit score, they may charge a higher interest rate to reduce the risk of you not paying them back. You may also find yourself limited to small borrowing amounts. Lenders tend to save their best deals for customers with high scores, so they’re unlikely to offer you promotional rates and rewards if you have a bad credit rating.
But remember, each lender has different criteria when assessing your credit history – so some may see you more positively than others. By checking your free Experian Credit Score, you can get a good idea of where you stand. The higher your score, the better your chances of being accepted for credit (and at the best rates).
Can you fix bad credit?
Absolutely – there are plenty of things you can do to improve your credit score!
Your score isn’t set in stone and can regularly change. But if you have a low credit score, it can take a little patience to get it to where you want it to be. Here are some simple steps you can take to get it back on track:
- Make payments on time and in full
This improves your score over time as lenders usually see it as a sign you’re managing your money responsibly - Stay below your credit limit
Try to use 30% or less of the amount you’re allowed to borrow on things like credit cards and overdrafts - Register to vote
This is a simple way to improve your score. Make sure your address is up-to-date on the electoral roll as this helps lenders confirm your identity and location - Space out your credit applications
Each time you apply for credit, a hard credit check will be recorded on your report and your score will dip. So it’s wise to spread out your applications and only apply for credit you’re likely to get. We’ll calculate your eligibility when you compare credit cards, personal loans or mortgages with us. Searching with us won’t affect your score. (Remember, we’re a credit broker, not a lender†). - See if you could get an instant score boost
By securely connecting your current account to your free Experian account, you can show us how well you manage your money. Your regular payments to things like savings accounts, council tax payments and digital subscriptions such as Netflix may give your score an instant lift when you use Experian Boost (score increase subject to status)
What causes a bad credit score?
Your credit score reflects how lenders see you. If you have a low credit score, there may be information on your credit report that lenders see negatively. For example, late payments may make lenders think you won’t pay them on time, so your score will be lower to reflect this.
There are many factors that affect your score – some more than others. Bankruptcy will lower your score far more than one late payment, for example.
It may seem odd, but never taking out credit can also give you a poor rating. Lenders like to see that you’ve managed credit successfully in the past. If they don’t have enough information to assess you, they may be less likely to approve your application. The good news is there’s lots you can do to build a credit history.
How long does it take to go from bad to good credit?
Building a good credit score doesn’t happen overnight. But it’s a job worth doing if you want better credit offers. There’s no set time frame for changing your bad credit score to a good one – it’s different for everyone.
If you’re worried about the state of your credit score, CreditExpert can help. It's packed with tools to help you get your credit score exactly where you want it. It gives you personalised tips on things you can work on to grow your score. It can even predicts how much your score could go up if you follow these tips. Best of all, you can try CreditExpert for free*. (New customers only. Free for 30 days, then it’s £14.99 a month. If it’s not for you, simply cancel any time you like).
How can I keep track of my credit score?
You can check your Experian Credit Score at any time. It updates every 30 days if you log in. Viewing your score is free and will never affect it.
Check your score for freeA CreditExpert subscription may suit you if you want to see what’s affecting your score. You’ll get daily access to your Experian Credit Report, important alerts to certain changes on your report, personalised tips to improve your score and more.
Start your 30-day CreditExpert trial*As an expert in personal finance and credit management, I bring a wealth of knowledge and hands-on experience in the field. My expertise is grounded in a deep understanding of credit scoring systems, financial history analysis, and the intricacies of credit reports from major agencies like Experian. I've helped numerous individuals navigate the complexities of credit scores, providing tailored advice to improve their financial standing.
Now, let's delve into the concepts mentioned in the article:
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Credit Score Definition:
- A credit score is a numerical rating based on an individual's financial history, reflecting their reliability in repaying borrowed money.
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Credit Score Ranges:
- According to Experian, a credit score of 561–720 is considered Poor, while 0–560 is classified as Very Poor.
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Credit Score Variability:
- Emphasizes that credit scores are not fixed and can be improved through specific actions.
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Credit Reference Agencies:
- Mentions that different lenders and credit reference agencies may have varying methods of calculating credit scores. Experian is presented as the provider of the UK’s most trusted credit rating.
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Impact of Bad Credit Score:
- Highlights that a poor credit score can make it harder to borrow money and may result in higher interest rates. Lenders may limit borrowing amounts and reserve better deals for those with higher credit scores.
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Improving Credit Score:
- Offers practical steps to improve a credit score, such as making payments on time, staying below credit limits, registering to vote, and spacing out credit applications.
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Instant Score Boost:
- Introduces Experian Boost, a feature that allows users to connect their current account to potentially get an instant score increase by showcasing responsible financial management.
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Factors Affecting Credit Score:
- Identifies factors that contribute to a poor credit score, including late payments and the importance of having a credit history.
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Time Frame for Credit Improvement:
- Stresses that building a good credit score takes time and varies for each individual.
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Credit Monitoring Services:
- Recommends CreditExpert as a tool to monitor and improve credit scores, offering personalized tips and predictions on score improvement.
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Free Credit Score Check:
- Encourages users to check their Experian Credit Score for free, with updates every 30 days.
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CreditExpert Subscription:
- Introduces CreditExpert subscription, highlighting benefits such as daily access to the Experian Credit Report, alerts to changes, personalized tips, and more.
In summary, the article provides comprehensive insights into understanding, improving, and monitoring credit scores, making it a valuable resource for individuals looking to enhance their financial well-being.
