Jan 28, 2021

Have you ever found yourself in the position of applying for a credit card or loan thinking you have

good or excellent credit, only to soon find that the credit score that the card issuer or lender has

seen was lower than what you saw on with the credit reference agencies? Well, you’re not alone

so I thought we would help explain why this might be. First things first, it’s important to note that

lenders don’t actually use your credit score. Instead they take the underlying data and run it

through their own ‘scoring’ process. More on that in another article.

There are three main Credit Reference Agencies (CRAs) in the UK — Experian, Equifax and

Transunion — and each owns a different credit report on you. Further, they each have their own

method for calculating your credit score. That’s one of the reasons your score will vary from

agency to agency. The higher your credit score is, the more likely you will be accepted for credit.

However, not all the credit reference agencies use the same methods to come up with their scores

and they also use different ranges of numbers to determine what is a good, fair or poor score.

Experian’s credit score ranges from 0 – 999, while TransUnion has a range from 300 to 850. A

good credit score according to Experian is between 881 and 960, with fair between 721 and 880.

Meanwhile, TransUnion defines a good credit score is from 628-710.

However, another reason your score might be different across your three credit reports is that each

credit reference agency may have collected different data on you. How does this happen?

Firstly it could be because the data each collects (or doesn’t) has come from different sources. For

example one lender might report to only one of the credit reference agencies but not to the others.

This would be the case if you had a credit card from a company that reported to Transunion, but

not to Equifax or Experian for instance.

Or secondly, it could be because there are errors on one or more of your credit reports. Errors on

your credit report can cost you money should you be offered high rates of interest on credit

arrangements as a result. That’s why it’s important to check each of your credit reports thoroughly,

and correct any mistakes you find. (Find out how to fix mistakes on your credit report here.)

The difference in scores can be really frustrating, because a lower than expected score can mean

a more expensive loan. This is definitely something that makes it harder for us all as consumers to

make informed financial decisions.

The good news is that the efforts we all make to improve our scores should improve our scores

across the board. Making on-time payments and avoiding maxing out your limit on credit cards are

great starting points or of course you can open a LOQBOX (shameless plug).

Hopefully this will help demystify some of the different numbers you may see with different CRAs

and will help you when making future financial decisions. If you have a subject around credit

scores or LOQBOX in general, please get in touch and we will try to shine a light on different

topics. Treat us like an agony aunt if you must - for now, happy credit building!

Build your credit score

Get in touch

Katy Ringsdore - Head of Media Relations

Email us