There are a lot of misconceptions about what the average credit score amongst everyone in the UK is. The news and Office of National Statistics tend to report the problems of consumer debt regularly which leads to negative perceptions. Reports extensively cover consumer debt statistics and consumer debt is an important topic that certainly needs to be reported on, but does reporting so much on consumer debt negatively impact perceptions around the average credit score? In this article we get to the bottom of this question – what’s the average credit score in the UK?
What is the Average Credit Score in the UK?
The average credit score in the UK is 383 with Equifax and 759 with Experian. There are three main Credit Reference Agencies (CRA) in the UK: Experian, Equifax and TransUnion. Each CRA uses a different scale to assign a credit score so it’s important to know each one (this data is correct as of 16.03.2020).
0-560 – Very poor
561-720 – Poor
721-880 – Fair
881-960 – Good
961-999 – Excellent
0-279 – Very poor
280-379 – Poor
380-419 – Fair
420-465 – Good
466-700 – Excellent
0-550 – Very poor
561-565 – Poor
566-603 – Fair
604-627 – Good
628-710 – Excellent
Since there are three different scales for measuring credit scores it’s hard to pinpoint an average across the entire United Kingdom.
TransUnion: has withheld from releasing an average credit score for the entire country but they do acknowledge that people residing in the Kingston-upon-Thames neighborhood of London hold the highest average score of 547 out of 710.
Equifax: has published the average credit score in the UK to be 383 out of 700 which falls in the fair category.
Experian: publishes average credit score data based on location and age group via their interactive credit map. The average score among all of its customers is 759 out of 999 which also falls in the ‘fair’ range.
It’s safe to assume that amongst the 67 million people in the UK, the average credit score typically falls in the fair range amongst all three credit rating agencies.
Why is Credit Important in the UK?
Credit scores are an important measure of financial health in the UK. Having a credit score is useful because banks and lenders typically like to lend money to people who are likely to repay. It’s also worth noting that banks aren’t required to lend to anyone they deem risky.
Having good credit history is important if you want to get approved for:
- Credit cards
- Personal loans
- Mobile phone contracts
- Renting a flat
- Auto loans
- Access to utility services
- Much more
Some employers may even ask to run a credit check on you before offering you employment, however they need your permission to do this.
The point is, having credit history in the UK is important. But no need to worry if you just moved here from overseas and need to get started. It can be a slow process, but if you manage things correctly, you can and will succeed.
What are the First Steps to Building Credit in the UK?
It’s clear that having credit history is important to gaining financial freedom in the UK, which leaves us asking the question: where do we start? The good news is that it’s fairly easy to get started on the first few steps!
- Get a UK Address: you will need a permanent address in the UK to register and begin building credit.
- Open a Current Account at a Bank or Credit Union: This may be a bit of a challenge since you need a permanent address to open a bank account. Consider looking into if you’re able to open a UK bank account ahead of time in your home country. Citibank and HSBC are international banks that typically allow for this.
- Register to Vote: getting on the electoral roll is an easy way to increase your credit score. It’s important to note that this option is only available for people moving to the UK from Commonwealth countries such as Australia or Canada.
- Start building credit using debt, apps and more: credit builder apps can help you build credit quickly if you are new to the UK
- Get paid into your UK bank account: showing proof of employment and steady income will help establish credit in the UK.
For more information on how to build credit in the UK check out these resources:
- Credit Builder Information Hub
- 8 Ways to Build Credit That You Didn’t Know About
- Top Credit Builder Tools for 2021
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