We’re in danger of sounding like a broken record here, but if you’re new to the blog, we’re about to let you know that there’s no such thing as an average credit score.
That might sound like the opposite of what you’ve heard elsewhere, but bear with us!
The thing is, the credit score given to you when you check your credit history isn’t what lenders see when you apply for credit. They judge their decision on a whole host of things, but that score isn’t one of them.
Be a smart credit-checker
Instead of relying on the credit score you find on your Experian, Equifax or Callcredit report, you should look at the other details on there instead.
All the other pieces of information – like your history of managing credit, how much money you owe at the moment, how many lines of credit you have open and your previous home addresses – are what a lender looks at when you apply for a credit card, loan or mortgage.
This is why you should be looking at these pieces of information on your credit history; instead of the score you’re given.
Each lender makes their own calculations when you apply for credit. They’ll base this on the information in your credit history and your application, and they might score you based on their own scale.
It’s tough to pinpoint the features an average credit history might have. At the end of the day, everyone’s history of managing credit will be completely different, so comparing them against one another is difficult. And, what one credit reference agency says is good, another might say is average.
Not only this, but it’s not really much use comparing your credit history to what the “average person” has. This shouldn’t really matter to you.
But to make things simple, let’s use the word average to mean the middle ground instead. So maybe you don’t have what is regarded as a bad credit history, but it’s not quite good yet either.
Reasons why your credit history might be in the middle could include:
You haven’t missed any payments, but you’ve not been using credit for very long. It takes time to build a good credit history, so you might be in the middle.
You may have had a poor credit history from defaulting or missing payments but you’ve been borrowing responsibly and are repairing the damage.
Building a good credit history takes time, but it’s worth it in the end. You can find out what a good credit history is – and what it looks like – here.
The time you put into improving your credit history is your own personal and unique journey. Comparing it to an average won’t offer anything new to the table, but it might make you feel a bit rubbish if yours isn’t as good!
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.