- What does my credit score mean UK?
- What does an excellent credit score mean?
- What does it mean when your credit score is 0?
- Types of credit score
- What your credit score means
To know the credit score meaning, first, we need to understand that a credit score is basically a number. This number usually ranges from 300 to 850. Credit score has a direct impact on your financial life because the lenders look at your credit score to decide whether or not to offer you credit.
Every businessman or company has its own credit score. This credit score is calculated using a couple of variables. These variables include the total number of credit accounts you hold, overall debt levels, your payment history, and the amounts stored in those accounts of yours. Hence, you can say that your credit score somewhat determines your borrowing future.
Now, why exactly is credit score so important?
Your credit score is pretty important because the interest rate you pay to your lender usually depends upon your credit score. Therefore, lenders will first look at your credit score and then decide whether to give you a credit or not. Not only that, if you apply for a loan, but your credit score will also play a vital role there too. It can directly affect your loan in terms of it being approved or declined.
In a nutshell, your credit score determines the interest you pay on loans and decides if your credit request will be approved or declined.
What does my credit score mean uk?
Your credit score is a number calculated based on the information gathered from your credit report. The higher this score is, the better is your chance of being approved for a loan or credit or even a mortgage at a good rate.
Before a lender decides to offer you credit, they will usually look at the following information: such as your borrowing history, public court records, and linked financial data. Credit reference agencies in the UK such as Experian, TransUnion, and Equifax have their credit scales that you can use to check where you sit (ranging from poor to excellent) on that particular scale.
What does an excellent credit score mean?
The most prominent credit reference agencies in the UK usually use five different categories for keeping a scale to credit scores. This numerical scale ranges from poor to excellent. These categories are specifically very poor, poor, fair, good, and excellent. So, the below table will give you a clear idea about how an excellent credit score looks like.
Credit score range
If you have an excellent credit score, it means that it will be very easy for you to borrow money, apply for credit cards and loans. An excellent credit score will enable you to get the best interest rates and abundant credit card limits.
What does it mean when your credit score is 0?
If your credit score is zero, then it means that you have not established Credit scores, you don’t have a credit account, you have no credit history. It means you need to start your credit account. Having a credit score of zero implies that you did not yet prove your ability in terms of borrowing and paying off loans.
Types of credit score
There are two main types of credit scores such as the VantageScore and FICO (Fair Isaac Comparison) Score. These two types of credit score models are used for determining how well you are able to pay off your debts.
The FICO score ranges from 300 to 850 and it is the most common and best-known credit score. To calculate your FICO credit score, the factors involved are payment history, length of credit history, amounts owed, credit mix, and new credit.
The three credit bureaus (Experian, TransUnion, and Equifax) also created VantageScore. To calculate this score, the factors considered are payment history, credit mix and experience, credit usage, available credit, existing balances, and age of credit history.
What your credit score means
|999 credit score||Excellent||You have the maximum or highest credit score and your credit or loan request is most likely to be approved and you will get the best interest rates.|
|726 credit score||Fair||You will be offered fair rates. However, the credit limit you get might not be abundant.|
|677 Credit score||Poor||You might get high-interest rates even if accepted for credit cards or loans.|
|784 Credit score||Fair||You will be offered fair interest rates.|
|741 Credit score||Fair||You have a fair chance of credit offers with nice rates.|
|673 Credit score||Poor||You might have to give high-interest rates.|
|620 Credit score||Poor||It will affect your chances of getting good credit offers.|
|634 Credit score||Poor||You have to pay high-interest rates.|
|562 Credit score||Poor||Might be rejected from the offer.|
|718 Credit score||Poor||You have a fair score with moderate credit limits.|
|772 Credit score||Fair||You will be accepted for credit offers.|
|807 Credit score||Fair||Your application will be accepted with good credit limits and rates.|
|822 Credit score||Fair||Most likely to be offered the best rates and generous credit limits.|
|626 Credit score||Poor||May have to pay high rates if the application is approved.|
|702 Credit score||Poor||You will pay high-interest rates.|
|718 Credit score||Poor||Moderate interest rates.|
|772 Credit score||Fair||Moderate credit limits.|
|562 Credit score||Poor||Low chances of acceptance by lenders.|
|807 Credit score||Fair||You will get a reasonable deal.|
|626 Credit score||Poor||Your interest rates may not be your favorite.|
|702 Credit score||Poor||Your application will be accepted and you will be given a moderate offer.|
|822 Credit score||Fair||It’s likely you will get a reasonable offer.|
|611 Credit score||Poor||Even if your request is accepted, credit limits and interest rates will not be very generous.|
|500 Credit score||Very poor||Your application will be rejected.|
|300 Credit score||Very poor||The application will be rejected.|
|520 Credit score||Very poor||You have a very poor credit rating and your credit card application might be rejected.|
|850 Credit score||Fair||Lenders might be willing to offer you credit.|
|750 Credit score||Fair||You will get reasonable interest rates from lenders.|
|657 Credit score||Poor||Might be accepted but may have to pay high rates of interest.|
|601 Credit score||Poor||Might not be accepted for credit cards.|
Your credit score will ultimately determine the amount of interest you will have to pay on loans. Not only that, but your credit score will also decide if your credit request will be approved or declined by lenders. In a nutshell, lenders are going to check your credit score to assess your reliability in terms of borrowing and repaying debts. If you would like to know how to get credit score, you can take the help of DataGardener and discover your credit score in no time. Based on that, you can manage your overall finances or even take measures to boost your success rates of loan or credit approvals.
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