What is a bad credit score?

What is considered a bad credit score in the UK?

Your credit score is a number used by credit reference agencies (CRAs) to help give you an idea of how your financial history is interpreted by potential lenders. There are three main CRAs in the UK — Equifax, Experian, and TransUnion — all of which use different scoring systems.

These are what different credit reference agencies consider a 'good' or 'bad' score to be:

Credit rating	Equifax	Experian	TransUnion
Very Poor	0 - 438	0 – 640	0 – 550
Poor	-	-	551 – 565
Fair	439 – 530	641 - 860	566 – 603
Good	531 - 670	861 – 1,000	604 - 627
Very Good	671 – 810	1,001 – 1,120	–
Excellent	811 – 1,000	1,121 – 1,250	628 – 710

There could be all sorts of reasons for a low credit score, from missed payments to unfavourable financial associations. Keep in mind that most marks on your credit report will only last six years, after which they're removed.

Your low credit score may even be down to having few or no credit agreements, which may be referred to as a thin credit history.

It's also worth knowing that Experian updated its credit scoring model in 2025. If your score has dropped recently despite no change in your financial behaviour, this could be why — nearly half of consumers were expected to see a change in their band under the new model. Experian has confirmed this won't affect how lenders assess you, but it may affect the number you see when you check your score.

Why is my credit score low?

There are lots of reasons why someone might have a bad credit score. You could have missed payments, defaulted on debts, or simply have very little credit history at all (sometimes called a "thin file"). Even small mistakes on your credit report can make a difference.

What are the consequences of a bad credit score?

Having a bad credit score can affect your financial options in a number of ways.

• Higher interest rates — Lenders calculate their decision to lend money based on risk. When the risk increases, they will usually charge higher interest rates and offer lower credit amounts or limits to counteract it. This is to offset the potential cost of recouping the money later.

• Being eligible for fewer products — While there are brokers who specialise in lending to those with bad credit, your options are likely to be more limited. It's always a good idea to use eligibility checkers before submitting any applications. These let you know the likelihood of being accepted without affecting your credit score.

What causes a low credit score?

Some of the most common reasons for a low credit score include:

1. Missed payments

Missed or late repayments are reported automatically and can have a significant impact on your credit score. This goes for all credit accounts, including credit cards, store cards, loans, mortgages and some mobile phone contracts.

If a payment is overdue by 30 days or more, your lender might report it to one of the credit reference agencies, where it can stay on your record for up to six years.

If you're struggling to make repayments, contact your lender. They may be able to discuss alternative payment plans.

2. You've defaulted or got a CCJ

If you've missed multiple payments, this can lead to a default notice. A default is only served after several (typically 3–6) payments are missed. The lender may ask for all the debt back or arrange an instalment plan. If you pay within 2 weeks, the default will be removed from your file.

The next step after a default is a County Court Judgment (CCJ). A CCJ is a court order for lenders to recover the debt you owe. A CCJ can be removed from your credit file if it's paid off in full within 30 days.

3. Financial associations

Have you ever shared a credit commitment (loan, bank account, etc.) with someone or acted as a guarantor? This is known as a financial association, and any financial mistakes they have made may also be bringing your score down.

You can contact the three credit reference agencies to get a notice of dissociation if you no longer have a financial connection with the person and want to remove the link.

4. Mistakes on your credit report

Inaccuracies on your credit report can mean your credit score is lower than it should be. It's a good idea to regularly check your report with all three main credit reference agencies to make sure everything is correct. If you do think there is an error on your report, you can contact the agency directly to dispute it and ask for it to be removed or corrected.

5. You're not on the electoral roll

Lenders need to check that you are who you say you are. Being registered on the electoral roll is one of the best ways to prove your identity and address. It's easy to get on the electoral roll — you can do it online in just a few minutes, and doing so can even boost your credit score.

If you can't get on the electoral roll (for example if you're not from an EU or Commonwealth country), you can register your proof of address with the credit reference agencies independently using a UK driving licence or utility bill. Contact the agency directly to find out how to do this.

6. You have little or no credit history

If you have no record of handling credit previously, lenders have no evidence that you can borrow responsibly. This is referred to as having thin credit and can give you a lower score than you'd like. Thin credit can mean you have a low credit score, despite having no debt.

Your score is based on your credit history in the UK over the past six years or so. If you've just moved to the UK, any lines of credit from your home country won't be counted in your report.

You could establish a positive credit history over time with a credit-building credit card. Just make sure you pay back the amount in full each month to get the best chance of boosting your credit score.

7. Changes in credit usage

How much you borrow also affects your score, as this gives a clear picture of your affordability. If you have suddenly spent more on a credit card, like by buying Christmas presents or booking flights, this can cause it to drop.

This is based on your credit utilisation ratio — the percentage of your available credit that you are using. Generally, it's recommended to stay below a quarter of your limit. If you come close to your limit, it may look like you have become too reliant on credit.

The good news is you can see your credit score improve within a month once you reduce your credit utilisation.

Closing old accounts can also affect your credit utilisation, as this reduces the total credit you have available. So, if you've recently closed an old account, this may temporarily lower your score.

8. Multiple credit applications in a short period of time

When you apply for credit, wait 3–6 months before applying again, if possible. Applying for multiple sources of credit in a short space of time can harm your score, as it gives lenders the impression that you're relying heavily on credit.

Every application also adds a hard check to your credit report, which causes your score to take a temporary dip. Applications stay on file for a year.

Use a soft search eligibility checker to understand what your chances are of being accepted for credit — these have no effect on your credit score.

9. You've only got one type of finance

Successfully managing a range of credit commitments (e.g., an overdraft, mortgage, credit card, mobile phone contract, and car insurance) demonstrates an ability to handle credit well. It can also help to increase your credit score.

10. You've taken out a mortgage

Have you recently taken a mortgage out? This can cause your score to drop, as lenders haven't seen consistent repayments yet. A year of on-time payments will be a positive signal on your credit report.

Why is my credit score low when I have never missed a payment?

It can be frustrating to see a low credit score when you've always paid on time. But payment history is just one part of your credit profile. Other factors that might be lowering your score include:

• A short or limited credit history
• High credit utilisation (using a large portion of your available credit)
• Not being on the electoral roll
• Only having one type of credit account
• Mistakes or outdated information on your credit report

How to improve a bad credit score

Your credit score will naturally shift and fluctuate over time, based on how you handle your existing credit and the changing circumstances of your finances.

Sudden drops in your score are often nothing to worry about and even the most serious of mistakes are repairable with time. You can start making positive changes today by following these simple steps to building your credit score.

If you're struggling with debt, you can access free financial advice and support from a professional debt specialist. Visit Money Wellness, StepChange, Citizens Advice, National Debtline, or MoneyHelper to find out more.

Don't panic about a bad credit score

A bad credit score doesn't define your financial future. Everyone's circumstances are different, and the good news is that credit scores aren't fixed. With time, consistency and the right actions, you can turn things around.