How credit scores really work
Lesson 1 of 12 in our free Credit Cards: Tool, Not Trap guide: a 5-minute money game with the key points below.
Reading is cool. Playing is cooler.
This lesson is a 5-minute game. Free, no sign-up needed.
The story so far
Dex: My credit score is 999. I checked one app. I'm basically a bank now.
Nana: Which score, Dex? There isn't just one.
Chip: Each credit reference agency uses its own scale. Lenders don't even see that app number. They read your credit FILE and apply their own rules.
Nana: Stop chasing the number, love. Look after the file and the number looks after itself.
Questions you'll answer
Mo's app score dropped 20 points this month. What does that actually tell him?
Something changed on his file, so read the file itself. Right. Maybe a higher balance, a new search or a missed payment. The file shows which, and if it's wrong he can ask for a fix.
Quick facts
- Myth: “There's one official UK credit score that every lender uses.” — There isn't. Each agency has its own scale, and each lender scores you its own way.
- Fact: “Two lenders can say yes and no to the same person on the same day.” — Different lenders have different rules and appetites for risk.
- Fact: “The score in an app is a guide, not the number a lender decides on.” — It's a handy summary of your file. The lender reads the file itself.
- Whether you pay your phone contract on time → On your credit file. Payment history is the heart of your file.
- Your credit card limit and balance → On your credit file. That's how lenders see how much of your credit you use.
- Hard searches from credit applications → On your credit file. Other lenders can see recent applications.
- Your salary → Not on it. Income isn't on the file. Lenders ask you for it separately.
- How much you have in savings → Not on it. Savings balances aren't on your credit file.
- Whether you're on the electoral roll at your address → On your credit file. It helps lenders confirm who you are and where you live.
- People you share a joint account or loan with → On your credit file. Financial links show, so a partner's file can matter to yours.