UK credit bureaux and how each measures credit ratings

A good credit score can impact the decisions lenders make when you apply for credit. Your credit score, in many ways, represents your creditworthiness. The higher the score, the better you look to potential lenders, therefore increasing your chances of getting a good deal when applying for a personal loan or getting a credit card.

• Why are credit credit scores different?
• TransUnion credit ratings
• Equifax credit ratings
• Experian credit ratings
• How can I view my credit score for free?
• Should I check my credit report regularly?

Why are credit scores different?

Each of the three main credit rating agencies in the UK uses its own system and methods to calculate scores. Generally, the information held on individuals is likely to be similar. However, there are likely differences in how the data is processed, and what factors influence a score the most will also differ. The score ranges also differ numerically.

As a result, your score might not look the same or be consistent with each credit bureau. It also means a lender's decision may be swayed by the credit report and score used. However, it is unlikely you’ll see a drastic difference overall in your creditworthiness - or at least that should not happen.

Knowing what is a good credit score in the UK and what's bad for each credit rating agency (CRA) can give you better insight, especially if you’re looking to borrow money. We explain more about each main CRA and how these measure scores next.

TransUnion credit ratings

TransUnion is an American credit rating agency and one of the three main credit bureaux in the UK, a group commonly called ‘The Big Three’. TransUnion provides consumer credit reports, which are used by lenders, credit card companies, landlords, and other creditors.

TransUnion, previously known as Call Credit, is currently the second largest of the three Credit Reference Agencies (CRAs). TransUnion uses VantageScore® as its scoring system. Factors that impact a score include paying your bills on time, maintaining low balances and not taking on too much debt, which can help your credit profile, resulting in a higher score.

TransUnion credit ratings are measured as follows:

• 0 to 565 - Needs work
• 566 to 603 - Fair
• 604 to 627 - Good
• 628 to 710 - Excellent

Equifax credit ratings

Equifax started in the USA and is also one of the main credit reference agencies in the UK. It uses its own unique scoring system, with a range from 0 (the lowest score) to 1,000 (the highest score).

Besides providing credit reports and scores, Equifax tells lenders how often there have been credit searches on your credit record, often referred to as hard credit checks or soft credit checks. Like other credit rating agencies, Equifax keeps public records, such as county court judgements or bankruptcies.

Equifax credit ratings are measured as follows:

• 0 to 438 - Needs work
• 439 to 530 - Fair
• 531 to 670 - Good
• 671 to 810 - Very good
• 811 to 1,000 - Excellent

Experian credit ratings

Experian has been in operation for some 125 years. It's a global company with operations in 37 countries and information on over 1 billion people. Although its origins were in the USA, in 2006, Experian was listed on the London Stock Exchange, with its headquarters moving to the UK.

Like the other main CRAs, Experian calculates credit scores using data on payment histories, types of loans, county court judgements, defaults, and other factors. The score runs from 0 to 999, and the higher the score, the better your credit rating.

Experian credit ratings are measured as follows:

• 0 to 720 - Needs work
• 721 to 880 - Fair
• 881 to 960 - Good
• 961 to 999 - Excellent

How can I view my credit score for free?

You can get your credit report in several ways, including directly with CRAs. However, this service will cost a monthly fee unless you cancel during the free trial period. The good news is there are many free ways to see your report and score. For example, ClearScore (services provided by Equifax) or Credit Karma (services provided by TransUnion). Experian does offer access to a free credit score but with limited details.

You can also request a statutory credit report. This is a free, basic version of your credit report that credit bureaus must provide you when you request it. Normally, these offer one-off limited views of your credit history.

Should I check my credit report regularly?

Yes. One of many common credit score myths is that checking your report regularly hurts your score. But there are good reasons to check your report regularly.

For example, if you’re looking for a short-term loan or credit or trying to borrow money to buy a home, it's likely one or multiple credit checks will be made. Viewing your credit score and history will help you understand how lenders may see you.

Another common myth is you need a great credit score to get a loan. While it is easier to be approved for a loan with a decent score, lenders will also look at other factors, like income and affordability.

One thing is certain, though: there is no such thing as a guaranteed loan - even if you have a great credit score. All UK lenders must perform adequate affordability checks before approving you for a loan.

Reviewing your credit report regularly can also help you see how to improve your credit score. It will also help you pick up suspicious activity and protect your finances from scams, such as identity fraud. For example, you will be able to see if attempts have been made to try take out credit in your name.

In summary

Checking your credit score regularly is important, especially if you’re considering borrowing. The three main credit rating agencies or bureaux in the UK are Equifax, Experian and TransUnion. Currently, these measure credit scores differently.

While scores vary depending on the CRA or bureau, you can still access your credit score and report for free. The higher your score, the better; it will give you a better chance of borrowing money if needed.

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