5 minute read 

When you apply for credit, your credit score gives you an idea of how companies may look at you. 

If your score is high, lenders will see you as less of a risk. So, if you want to get a new credit card, a loan, or even a mortgage, a good credit score is good news. No matter what you need credit for, making sure your score is good or even better, excellent, will make it more likely that you will be accepted and that you will get better rates. Here, we'll look at what a good credit score is, how it's calculated, and what makes it "good." 

No 'magic' number 

When it comes to your score, there is no "magic" number. Different companies will look for different things in customers, so while you might be perfect for one lender, you might not meet all of their requirements. Some credit agencies will  score from 0 to 999. A "good" score is between 881 and 960, and a "fair" or "average" score is between 721 and 880. It's a good idea to check your Credit Score before you apply for credit. This will help you make better decisions when it comes to applying for credit. 

How is a credit score calculated? 

Lenders will look at your credit report, application form, and any other information they have on you (if you're an existing customer) when you apply for credit. Then, your credit score is made based on all of this information. Each lender has a different way of figuring it out, mostly because they have access to different kinds of information and have different rules about who they will lend to. 
Most of the time, the higher your score, the more likely it is that you will be approved for credit at the best rates. 
Credit reference agencies, also termed “CRAs", figure out a version of your credit score. How each CRA figures this out is different, but they all look at the same things, like how much you owe, how often you ask for credit, and whether or not you pay on time. In our guide to what affects your score, you can learn more about the things that go into your score. 

How can you get a good credit score? 

There are many things you can do to improve your score, but it can take time, patience, and a little bit of willpower as well. 
Ways to improve your score:. 
Register on the electoral roll at your current address. This helps companies figure out who you are. 
Create a credit history. If you don't have much or any credit history, it can be hard for companies to give you a score, which can make your score go down. You can build up your credit history by taking a few simple steps, which is good news. 
Every month, pay your bills on time and in full. This shows lenders that you are a safe bet and that you know how to handle credit well. 
Don't use up too much of your credit. This is how much of your total credit limit you have used. For example, if your credit limit is £5,000 and you've used £2,500 of it, your credit utilisation is 50%. Most of the time, a lower percentage is seen as a good thing, and it should help your score go up. To help your Credit Score, try to use no more than 25% of your available credit. 
Once your score is where you want it to be, here are some tips for keeping it that way: 
Limit the number of credit applications you make. Don't be tempted to make too many in a short period of time, as this can make lenders think you are too dependent on credit and a higher risk. Your credit report will show a hard search for each application you make. Companies can see this, so it's best to apply over a period of time. 
Close accounts you don't use. If you have access to too much credit, lenders might think you won't be able to handle any more. 
Pay your bills on time. Accounts that are late or in default will hurt your score. When you're late on payments, your account is called delinquent, and when you've missed several payments, your relationship with the company has broken down. 
Don't borrow more than you can pay back. If you have trouble paying your bills and end up with CCJs, IVAs, or even bankruptcy, these things will stay on your credit report for up to six years and hurt your score. 
Watch out for people who try to scam you. Their actions could really hurt your grade. So, try to see if there are any strange things on your credit report. 

Next steps 

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