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Every time you apply for credit in any form, you are judged on your past financial behaviour. Your credit score will either unlock access to the cards, loans, and mortgages that you want – or keep them forever out of reach. But what is your credit score, how is it calculated, and what can you do to ensure your credit score presents you in the most favourable light?

What is a credit score?

Whilst the words ‘credit scores’ and ‘credit rating’ are regularly used in regard to assessing creditworthiness, what is really meant here is simply a record of your credit history – all the recorded personal and financial records about you and your past behaviour with credit.

There is no one single magic number that represents your ‘credit score’, by which all credit issuers can assess your risk as a borrower. Instead, there are three main consumer credit reference agencies in the UK (Equifax, Experian and CallCredit), each of which have developed their own unique way of deciding your credit score.

To further complicate matters, although credit scores are undoubtedly a very useful guide for consumers themselves to understand their creditworthiness and what any potential lenders would see, they are not used in isolation by credit suppliers when assessing applications. Instead, lenders amass information from multiple credit reference agencies, together with other proprietary data. The issuers then themselves apply their own unique algorithms to this data, the weighting and significance of which differs from supplier to supplier. The exact details of these algorithms are their most valuable trade secrets – the secret sauce upon which their business models are built.

How do lenders assess your credit application?

Credit issuers consider and assess a broad set of variables when you apply for credit – but fortunately those variables are well known, and there’s a lot you can do to boost your chances of being accepted for a credit product.

Application form

When applying for any form of credit, you will need to fill out an application form – online, on paper and posted, or at a bank branch.

The information requested on such a form will depend on the type of credit you are applying for, but typically they will be things like:

  • Full name, including any previous names
  • Current address, and any previous addresses within the last three years
  • Date of birth
  • Contact details
  • Employment status and income
  • Residential status
  • Other credit commitments, such as credit cards, loans, mobile phones, etc.

It is crucial that the information you provide is correct and complete, because if the credit issuer finds any anomalies when comparing against official records (like the electoral roll, for example), your application will be rejected immediately.

The decision to reject your application at this stage is not always because the issuers think you are a bad risk, but they themselves have a legal obligation to ensure that all fraud and money laundering regulations are strictly adhered to, and confirming that you are who you say you are is very much a part of that process.

Credit reference agencies

There are three main credit reference agencies in the UK, namely Equifax, Experian and CallCredit. Each of these agencies hold personal information about you and your credit behaviour over the past six years. What information do they hold about you and where do they get it from? And what can you do if the information is incorrect?

Personal details

Personal details are obtained from electoral roll records, which includes your full name, your date of birth, your address, how long you have lived at that address, the full name of anyone else you live with and your eligibility to vote in the UK.

Financial associations

This is information on any person you have had a shared financial responsibility with (for example a loan with a partner or friend). If the perceived creditworthiness of that partner or friend is poor, this could have a detrimental effect on your own. It is notable here that this rarely works in reverse – if your friend or partner has a better credit rating, yours is not likely to be improved because of that association.

Other lenders’ searches

This is a record of other credit issuers who have searched your credit file in the past six years. This information is retained because if you have made multiple credit applications in a short space of time, it could indicate to issuers that you are either desperate for the credit, or have been turned down for it in the past.

You can prevent these searches from appearing on your credit file by using an ‘eligibility checker’ when applying for credit, where only a ‘soft search’ – which leaves no permanent record on your credit file – is used by issuers to ascertain your likelihood of acceptance before you confirm your application.

Bankruptcy/CCJs/Court Notices

Any bankruptcy/IVA filings or court action are a matter of public record – the Insolvency Register and Register of Judgments, Orders and Fines respectively – and credit reference agencies store all this information. It is important to note that if you have undergone some form of court action such as bankruptcy or an IVA, and six years have since elapsed, it is always advisable to check with all the credit reference agencies that this has been removed completely from your file. It isn’t always an automatic process.


Any recorded fraudulent activity in regard to finances is cited here.

Previous credit behaviour

This is information provided by banks and other lending institutions about your current and previous behaviour in relation to credit. This will include loans, credit cards, mortgages, store credit, and your history of repaying such credit – whether these have been paid on time, or whether you have any late, missed or defaulted payments.

How do I find my credit file?

Before applying for any credit whatsoever, it is always advisable to check your credit file, so that you can see what the credit issuer will see, and to ensure that all the information retained on your record is correct and up to date.

There are a number of ways of obtaining your credit file. You can apply to each of the credit reference agencies independently and request a Statutory Credit Report, which they are obliged to send you. The cost for this is £2 per agency. Alternatively, most credit reference agencies offer a free trial, where you can obtain your records, and only pay a regular fee after a fixed period of time (typically 14 days or a month). If you do undertake this free trial, but do not wish to continue using the service, you must remember to cancel your subscription.

If you find incorrect information in your file, you should contact that particular agency immediately, and ask for it to be corrected – and inform them of any suspected identity theft, if you think that might be the case. You should also check your file with the other agencies to see if they need to be corrected.

Remember that all applications for credit are initially assessed on the information you provide in your application form, plus the information that can be obtained from credit reference agencies. Ensure that everything is in order before you apply (and where possible undergo a soft search eligibility check first to avoid leaving ‘footprints’ on your credit file) and you should give yourself the best possible chance of success.

For further reading, check out our guide on how to improve your credit score.