Many pandemic-hardened Britons have seen credit scores rise over the past two year, with many of them having saved more, spent less and reduced their debts.

Experian reports that the average UK credit score has risen from 776 in September 2019, to 797 this September. 

This was helped by the so-called ‘mortgage holiday,’ as well as the emergency payment freeze which allowed people to defer payments on credit cards and loans. 

Know the score: People aged 31-35 have the lowest credit ratings, according to Experian

Know your score: According to Experian, people aged 31-35 have the lowest credit scores.

Many people developed new financial behaviors during the pandemic. These included spending less, saving more, and reducing their debt.

James Jones, Experian’s head of consumer affairs, stated that it was encouraging to see credit scores improve on average.

“While many of us were able to pay down existing debt using lockdown-related savings,” others saw their incomes drop. But, thankfully, some credit scores were protected by payment freezes.

Experian’s research also revealed which UK areas have the highest and lowest average credit scores. 

The City of London (893) was the highest, followed by Wokingham (Berkshire) (880), and Chiltern (Buckinghamshire) (879).

Average credit scores by age
Age Group Average Score
18-20 823
21-25  792 
26-30  776 
31-35  770 
36-40  779 
41-45  792
46-50  804 
51-55  819 
55+  863 

Kingston-upon-Hull was the least popular with a score of 702, followed by Blaenau Gwent, Blackpool and Blackpool with scores of 707 & 713, respectively.

Research also showed that people aged 55 and older had the highest average score (863), while those in their twenties had lower scores. This could be because they are more likely than teenagers to use credit. 

Those aged 18-20 had an average score of 823, falling to 792 for 21–25-year-olds.

The lowest score was for those aged 31 to 35, which averaged 770, because they are more likely than others to have higher unsecured debt commitments. 

Credit scores will generally rise after that age as wages and borrowing power increase. 

Why do credit scores matter? 

Research by TSB shows that many Britons don’t understand credit scores or how they can impact their ability to access financial products.

One fifth of respondents to the survey did not know what credit scores were. 

A majority of respondents said they believed they knew the basics of credit scores, but they were not certain. More than half of respondents did not know their credit score.

According to TSB, nearly 25% of people have been denied credit because they have a low credit score. 

Low credit ratings make it difficult to achieve your ambitions.
Goal  % of people delaying due to credit score worries
Buying a house 22% 
Buying a car  20% 
Renovation of your home  14% 
Purchase new technology  13% 
Dream vacation  12% 
Start a business   10% 
Change of career  9% 
Buying a pet  9% 
Your dream wedding  8% 
Investing in shares  8% 
Source: Tymit 

A credit score is basically a number that credit reference agencies such Equifax, TransUnion and Experian have calculated. It basically sums up all the information in your credit reports, which detail your borrowing history.

Lenders like banks use this information to determine whether you are financially able to borrow money and if it is possible to repay it.

Higher credit scores mean that lenders view you as a lower risk. You’re therefore more likely to get credit approval and may be eligible for lower-interest rate products.

Experian Credit Score Bands

Very poor: 0-560

Poor: 561 – 720

Fair: 721 – 880

Good: 881-960

Excellent: 961 – 999  

Credit scores have a major impact on financial life. A poor credit score can make it difficult to get a mortgage, phone contract, or credit card.

In fact, one in three Britons say that worries about credit scores have put a stop to their biggest life goals, according to research from the fintech credit card provider, Tymit.  

The most elusive goals were to buy a property, buy a car, renovate a home, and go on a dream vacation.

Pella Frost, TSB director for everyday banking, stated that credit scores have a huge impact on everyday life. However, many people are not familiar with them.

“Understanding more about it will help you become more confident in your finances and increase your chances of getting credit when you need it.”

How can you improve your credit score

There are many ways to improve your credit score.

First, check your credit report for errors that could negatively impact your score. These are often easily fixed. 

Examples include duplicate accounts, incorrectly recorded missed payments, and fraudulent loans taken out in your name.

Knowledge gap: New research from TSB has found that many Britons do not understand credit scores and their potential impact on accessing financial products

Knowledge gap: New research by TSB shows that many Britons aren’t aware of credit scores and their potential impact upon accessing financial products.

A common misconception is that having no credit will result in a good credit rating. However, it can be difficult for credit agencies and credit agencies to assess you. As a result, your credit score could be lower.

Lenders need to be able to verify that you are a responsible borrower. This means that if you don’t already have a card it might be worthwhile to get one. As long as you pay the monthly installments.

Although credit is good, having too much credit can lead to a decrease in your score. Borrowers should limit their credit card spending and make sure that they pay back their loans on time. 

You can also improve your score by not withdrawing cash from a credit card and registering at your current address on the electoral rolls.

Simply by registering at your current address on the electoral rolls, you can prove where you live and who your family is, which will boost your score. 

You can avoid damaging credit scores by setting up direct debits to pay regular payments like rent, energy bills, and mortgages. 

This will help you avoid forgetting to make a payment which can have dire consequences for credit scores. 

Ten tips to increase your rating

1) Register at your current address to be on the electoral rolls

2) Make sure you use your credit card responsibly and keep enough credit available to cover your expenses.

3) Make sure to check your credit reports regularly and request that any errors be corrected

4) Never withdraw cash using your credit card

5) Limit credit application

6) If your credit is not good, stop applying for new jobs

7) If you don’t have a credit card, then get one – but just make sure you pay it off each month

8) Don’t miss repayments

9) Let your credit history mature

10) Don’t keep unused cards 

What about Experian?

Experian is now offering people a free way of boosting their credit score by a few points if they are willing to share information about regular payments they make, which are not normally included in a credit report. 

This could include, for example, council tax, Netflix, Amazon prime accounts, Apple Music, or Spotify accounts. 

They must not spend more than they earn and Experian will need to scan their main current account at a bank or building society that supports open-banking.

How can someone check their score?

A credit report provides information about your overall credit score as well as details about your credit accounts such bank accounts, credit cards and utilities.

It will also show your repayment history, including missed or late payments. 

There are many ways you can view your rating and past history for free.

Experian and Equifax offer free 30-day trials of their online service for 30 days. However, you must cancel before the promotion ends to avoid paying subscription fees.

Experian will begin charging £14.99 once the 30-day free trial is over whilst Equifax reverts to £7.95 per month.

Checkmyfile also offers a free trial to check your reports with both Equifax and TransUnion UK – although after 30 days it begins charging £14.99 a month.

You can also request a free copy of your credit report from each of the three major credit reporting agencies every 12 months.

Clearscore and Credit Karma offer free credit reports.

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