Credit scores, credit cards and borrowing

Every time you apply for a credit cardHow Credit Cards Work in the UKHow UK credit cards work: interest, APR, minimum payments, interest-free periods, fees, Section 75 protection and how to use a card without getting into debt.Read more →, a loan, a mortgage, a mobile contract or even some rental properties, the lender looks at your credit historyCredit reportA credit report is a record of your borrowing and repayment history, held by credit reference agencies and used by lenders to assess you.Read more →. That history is held by three credit reference agenciesCredit reference agencyA credit reference agency is a company that collects information about people's borrowing and sells it to lenders. The main UK agencies are Experian, Equifax and TransUnion.Read more → in the UK: Experian, Equifax and TransUnion. They each keep their own file on you and each uses its own scoring system, which is why you will see different scores and different labels such as "good" or "excellent" depending on where you look.

The most important thing to understand is that there is no single, official credit score. Lenders do not simply read a number from one agency. They combine the information in your credit report with their own rules about income, existing debts and the type of borrowing, and decide whether to lend and at what price. A score you see in an app is a guide to how your report looks, not a promise of what a lender will decide.

The good news is that the things that matter most are well understood. Paying on time, keeping balances well below your limits, being on the electoral roll at your current address, and avoiding lots of applications in a short period all help. Most negative information, such as missed payments, defaults and county court judgments, drops off your report after six years. Checking your own report is free and does not harm your score.

The guides below explain how credit scores work, how to read your report, how to fix mistakes, and how to choose and use credit cards and loans in a way that works for you rather than against you.