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ClearScore credit score – All you need to know article
ClearScore credit score – All you need to know article

If you are applying for credit, there is a crucial piece of information that could be the difference between you being approved and denied by banks or lenders: your credit score.

ClearScore is one of the few platforms where, unlike credit reference agencies, you can access a snapshot of your finances, including your credit score, for free.

But what is a ClearScore credit score and why is it so important? In this guide, we’ll tell you everything you need to know about your ClearScore credit score including:

  • What a credit score is
  • What ClearScore is
  • How ClearScore works
  • What a good credit score is on ClearScore
  • Why your credit score is so important
  • What can lower your credit score
  • How you can improve your credit score

What is a credit score?

A credit score is a measure of your creditworthiness or, in other words, a number that determines how likely you are to make payments in full and on time without defaulting.

It usually ranges from 300 to 850 with the higher the score, the better your financial situation looks to potential lenders and the more likely you are to be approved for credit products, such as a loan, mortgage or credit card.

Your credit score, which is personal to you, can be found on your credit report, or credit file, and can fluctuate from time to time based on the financial decisions you make throughout your life.

What is ClearScore?

ClearScore provides a wide range of services designed to help users access their financial history and improve their financial wellbeing.

It was the first company in the UK to allow users to view a snapshot of their finances, including their credit score, for free with its fundamental aim to empower people on both ends of the financial spectrum to manage their money better.

ClearScore can also recommend and suggest loans and credit cards that you might be eligible for based on your credit score and keep you updated with upcoming offers that are suited to your individual financial situation.

How does ClearScore work?

ClearScore helps users understand their financial situation by providing easy access to information related to their credit score and report.

It is able to provide its services for free by partnering with financial institutions and refers to itself as a ‘financial marketplace’ that gives people a complete overview of their finances without having to jump through hoops to do so.

ClearScore Protect also provides free identity protection against fraud by scanning the internet for evidence your passwords have been leaked so you can relax knowing your finances are in safe hands.

What is a good credit score on ClearScore?

When it comes to what constitutes a good credit score, there’s no right answer and what might be a good credit score on one platform might only be a fair credit score on another.

What’s more, different lenders have different definitions of what a good credit score is, and most will look at a variety of factors, such as your income and debt levels, so whilst you might be refused by one lender, you could still be accepted by another.

This is how ClearScore separates its score bands:

  • 0-409 – Let’s keep climbing
  • 410-519 – Moving on up
  • 520-604 – On good ground
  • 605-724 – Looking bright
  • 725+ – Soaring high

Why is my credit score important?

In the UK, a credit score, or credit rating, is an important tool that lenders use to determine whether you will be a suitable applicant for credit and what interest rate you are applicable for.

It is, essentially, a financial CV that outlines the financial decisions you have made in the past and gives lenders a glimpse into the kind of financial decisions you are likely to make in the future.

For example, if you make a poor financial decision, this could stay on your credit report for up to six years and prevent you from being approved for credit.

So, if you are planning to apply for a loan, mortgage, car insurance or even phone contract soon, it might be worth checking your credit score to ensure there is nothing that could potentially stop you from being approved.

What can lower your credit score?

There are a number of things that can be recorded on your credit file for years at a time and lower your credit score. This includes:

  • Late or missed payments
  • High credit utilisation
  • Limited credit history
  • Too many lines of credit
  • Too few types of credit

How can I improve my credit score?

Even if you have a poor credit score, there are several things you can do to improve your credit score and boost your creditworthiness in the eyes of a lender. This includes:

Confirm where you live

When it comes to applying for credit, a permanent address is typically needed and can increase your chances of being approved.

This can be done whether you are living alone, in shared accommodation or with your parents.

By confirming where you live – such as by registering on the electoral roll – you can prove to lenders that you live at your current address and ensure the information contained on your credit report is accurate and up to date.

Make payments in full and on time

The quickest, and easiest, way to improve your credit score is to make payments in full and on time.

For example, if you have a credit card, paying the balance in full and on time every month can help keep your credit score above a certain threshold and prove to lenders that you’re a responsible borrower.

Keep your credit utilisation low

Your credit utilisation is the percentage of credit you use and, by keeping it low, you can keep your credit score above a certain threshold.

For example, if you have a limit of £3,000 and you’ve used £1,500, your credit utilisation will be 50%.

However, in order to reassure lenders that you can pay back credit, you should ideally keep your credit utilisation below 30% or 20% wherever possible.

Check for errors

Whilst rare, errors on your credit report can, and do, happen.

You must, therefore, check your credit file from time to time and report any errors you find immediately to ensure your credit score is correct and accurately reflects your financial situation.

Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed’s, and various other debt solutions.

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Our debt experts, and insolvency practitioners continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

November 22 2022

Written by
Maxine McCreadie

Edited by
Maxine McCreadie