Credit score scales explained

Talk of credit scores can seem like a chore, but it’s really important to have a decent understanding of these. Credit scores have a big influence on your financial habits and any plans you may have to apply for a loan. 

We appreciate that the world of credit scores can be confusing, so as part of a series of dedicated articles about credit scores, we are here to help you learn more on the subject. At Octane Finance, we pride ourselves on providing market-leading car finance through our extensive panel of lenders. 

Offering a wealth of experience within automotive finance, we explain the various scoring systems used in the UK, how they differ, and what credit score you should be aiming for… 

Why is a credit score important?

When understanding how important a credit score is, it helps to think of a credit score as your financial CV. Much like a potential employer will consider your CV of work, a credit score will influence a potential lender. 

Having a healthy credit score will increase your chances of being approved for credit and loans from a wider pool of lenders. Keeping a good credit score will boost your financial reputation among creditors who will be all the more likely to lend to you now, or in the future. 

What is the credit score range?

Although credit scores can vary between models, all credit scores consist of a three-digit number that typically falls between 300 and 850 (but can range from 0-999). Designed to determine your credit risk to lenders, the lower the number, the least likely you are to be approved for finance, whereas the higher the number, the more likely you are to be approved by a lender.

How do I check my credit score?

You can check your current credit score online using an approved reputable credit reference agency (CRA). Every person in the UK is legally entitled to a free copy of their credit report every 12 months from one of the three main credit reference agencies - they are:

• EQUIFAX

• EXPERIAN

• TRANSUNION

Each of these credit reference agencies works slightly differently (we’ve explained more and added links, below), so we’d recommend exploring each option to find the agency that best suits your needs. By creating an account with your preferred supplier, you may also be able to access further free credit reports throughout the year.

The overall aim of a credit reference agency is to report on credit-related information about an individual from a variety of sources. Credit scores can either be generated for a personal finance application, or an application on behalf of a business. Each credit reference agency has a unique rating scale to offer a custom credit score. 

What credit score models are used in the UK?

As already mentioned above, there are three main credit reference agencies used by lenders in the UK. They are Equifax, Experian, and TransUnion. Each of these agencies has its own scoring system, so your credit score may vary depending on which of these models you use - these are taken into account by lenders when you apply for finance.

A guide to credit score scales 

To help you understand the scoring systems offered by each of the credit reference agencies, we’ve highlighted their credit score ranges per brand, in the sections below: 

Equifax credit score scale

Equifax scores range from 300 to 850 on a scale of ‘poor’ to ‘excellent’. As you can see from the table below, 300 to 579 is considered to be a poor credit score, a score of 580 to 669 is fair, 670 to 739 is classed as good, whereas a score of 800 to 850 is considered excellent. 

Experian credit score scale

By comparison, Experian scores range from zero to 999 using a scale described as ‘very poor’ to ‘excellent’. As you’ll see from the table below, 0 to 560 is a very poor credit score, a score of 561 to 720 is poor, 721 to 880 is fair, followed by 881 to 960 which is good, and finally onto 961 to 999 which falls within the excellent category.  

TransUnion credit score scale

Compared to both Equifax and Experian, TransUnion scores yet again differ. TransUnion scores range from 300 to 850 also using a scale from ‘very poor’ to ‘excellent’. Looking at the table below, you can see that a credit score of 300 to 600 is classed as very poor, a score of 601 to 657 is very poor, 658 to 719 is considered a fair score, moving onto 720 to 780 which is good, and last but by no means least, a credit score of 781 to 850 is excellent. 

In addition to the three major players, there are a number of other credit reference agencies used by lenders in the UK, which we’ve highlighted below. However, it’s important not to confuse an actual credit reference agency with a credit reference ‘provider’. 

By comparison, these are third party credit reference companies that supply you with credit score data for free. For example, ClearScore is a credit reference provider that supplies customers with access to a credit score rating courtesy of Equifax.   

VantageScore is a consumer-based credit scoring system which was actually developed by the top three credit reference agencies in the UK - Equifax, Experian, and TransUnion. The credit rating product serves as an alternative to the well-known American based FICO score system (created by the Fair Isaac Corporation). 

FICO Score is its own brand of credit rating system that uses five key areas to calculate a consumer’s individual credit score. To determine credit worthiness, the FICO Score system considers payment history, any debt owed, types of credit already used, any new credit accounts opened, and total years of active credit history.

Crediva is a credit reference service that specialises in providing UK consumers with an alternative credit scoring model to help improve on the traditional form of credit risk analysis. It is quickly being considered as an alternative option to the top three credit reference agencies in the UK. Crediva’s overall aim is to enable more lenders to say ‘yes’ by approving a greater number of finance applications.      

If you’re in the market for a new or used car, check out our dedicated credit score blog ‘What credit score is required for car finance?’ to find out what credit score is needed to be approved for car finance. If you’re looking to improve your credit score, then read our helpful guide ‘How to improve your credit score’ for our top tips.

Market-leading car finance solutions

As a well-established finance broker, here at Octane Finance, we are best placed to source vehicle finance for your new or used car from our considerable panel of lenders. We also offer specialist finance for customers hoping to secure funding for a classic car, race car, or prestige and supercar model. 

To give you a better feel of the monthly payments you could be expected to pay for your car on finance, use the handy finance calculator on our website and get in touch to find out how we can help.