A credit score is an independent assessment regarding the risk associated with lending money to a certain individual. The assessment is based off of the historical data which is included in someone’s credit history. In the UK, Experian and Equifax are the credit bureaus who compile all consumers’ credit history and relay the information to businesses or banks when someone applies for a line of credit.

In the United Kingdom, a person’s credit score is the largest determinant a lender uses when deciding whether a person is adequately suited to be lent money. Without a good credit score, UK citizens will have a hard time being approved for a mortgage, auto loan, credit card, or any other loan. If they are approved for a loan, the poor credit borrower will almost always be given a higher interest rate than those with good credit.

Building a good credit history and credit score can take years to accomplish. A credit score in the UK is based largely off of the individual’s history of paying back loans on time, but other factors are also taken into consideration. The other considerations are listed as follows:
1) An individual’s salary and length of employment with the current lender.
2) Whether the consumer is listed with the electoral register.
3) Whether the consumer has an active UK bank account.
4) How long the individual has been living at the same address.
5) Amount of current debt compared to credit availability.
6) Amount of recent credit or loan applications.
7) How long it has been since the consumer has had a bankruptcy, CCJ, or IVA.

If someone is told they have been rejected for a loan or line of credit because of a weak credit score, the first thing they should do is request a copy of their credit report. For a low fee, a credit report can be received from either Experian or Equifax.

After the report is received, the consumer can begin to repair their credit. The first thing the consumer should do is verify that all information on the report is correct. If the report is correct, the consumer can take the following steps to improve their credit score:
1) Make all future payments in full and on time.
2) Pay down existing debt.
3) Stop applying for credit until the score is repaired.
4) Register with the electoral register.
5) Open a UK bank account