Skip to content

24-hr payment line: 0161 543 1636 Existing customers: 0161 228 6194 New customers: 0161 543 3814

Credit Scores + Credit Files Explained

A computer with the word 'Credit Score' written on it.

Anyone who has a financial footprint on this earth has a credit score. But what is a credit score? How do you find out your credit score? What does the rating mean? And how can it be improved?

Let us talk you through the main things you need to know about credit scores and credit files.

What is a credit score and how will it affect me?

A credit score is calculated by credit reference agencies that receive information from any creditors, or lenders you have. This score is then made available to lenders so that they can determine the likelihood of you paying back the money you want to borrow.

Many factors contribute to your credit score. Some of these factors include:

  • How much debt you owe – Your credit score will be affected by how much you owe to creditors. If you are overusing your access to credit your credit score is likely to decrease. Hence, if you are already in significant debt it is important you avoid taking out additional credit.
  • The type of debt you have – Taking out numerous payday loans is likely to look suspicious to other creditors. As a result, this may damage your credit rating. On the other hand, having a debt such as a mortgage is not as a alarming, therefore this is not as likely to detriment your score as much providing your payments are made on time.
  • Your payment history – If you miss payments to your creditors this will be marked on your credit report. This acts as a signal to other creditors that you are already struggling to make credit repayments. Therefore, untimely payments cause your credit score to decrease, which makes it less likely for a creditor to accept you for new lines of credit.
  • The number of credit applications you apply for – If you try to take out a lot of credit agreements at once it is likely that your credit score may decrease

Whether you are applying for a new phone contract or your first mortgage, if you have a low credit score, it could mean that you may struggle to be accepted for a variety of types of credit.

What is my credit score?

Everyone’s credit score is dependant on their financial history. To find out your credit score for free, we recommend signing up to Experian or ClearScore.

What does my credit score mean?

Experian credit scores are based off the contents of your credit file. The score is always a number between 1 and 999, and anything above 881 is considered good. We have categorised the numbers you can receive for your credit score to tell you a little about what they mean.

Score Band
0-560 Very Poor
561-720 Poor
721-880 Fair
881-960 Good
961-999 Excellent

(Please scroll sideways if you can't see the full table.)

How can I improve my credit file and credit score?

There are several things that you could try to improve your credit score and the in-formation that is included in your credit file. We have a few suggestions that you may want to explore:

  • Make sure you are signed onto the electoral role. This is an easy way to improve your credit file.
  • Read over your free credit report and make sure all of the information on it is correct. If you spot something that you are unsure of you can have it investigated and removed from your report if this is warranted. If you are a DFH customer we can assist you with this.
  • Pay off your debts. One of the best things you can do is work on repaying your creditors. If you are already on a Debt Management Plan with us it is fundamental, you stick to making your affordable monthly payments on time.

Although these tips may not improve your credit score overnight, the long-term benefit of doing the above may help.

Worried about debts?

If you are worried about your debts and are looking to get a plan in place to repay them and boost your credit score our team may be able to help you.

Contact DFH Financial Solutions to find out if you could benefit from a Debt Management Plan.

Contact Our Team

Further reading