Households across the UK are feeling the pinch as a result of rising living costs and many are turning to borrowing to help see them through.
The problem is that borrowing costs are also rising thanks to higher interest rates. This means that if you’re thinking of applying for a loan, it’s likely to be more expensive than it was a year ago.
To get the most competitive interest rate on your loan, you will need to have a good credit score. But even if you have the very best credit score you can get at 999, your loan application won’t be guaranteed and you could still get turned down.
That’s why it’s important to understand exactly how your credit score works and what you can do to increase your chances of acceptance.
What does a 999 credit score mean?
A 999 credit score is the highest score you can achieve with Experian, the largest credit reference agency in the UK. You can check your credit score and report for free with Finder.
Having a credit score this high generally means that you have managed credit responsibly in the past, never missed payments and always repaid debt on time. It also means lenders are likely to be more willing to let you borrow again – and at the best interest rates too.
However, nobody has a single credit score. As well as Experian, the other major credit reference agencies (Equifax and TransUnion) produce credit scores of their own and use a slightly different formula to work this out. Some lenders also calculate their own credit scores.
Each company considers different factors when working out your credit score. Your credit report held with the main credit reference agencies could also contain different information.
When you apply for credit, a lender will look at the data held on you to determine whether it is happy to lend to you. This data includes existing levels of debt, unused credit limits, missed payments, your employment status and your income. Each lender has its own set of lending criteria. That means you could be rejected by a lender but accepted by another.
Experian score bands explained
Experian’s credit score bands are broken down as follows:
Score band
Rating
What it means
961–999
Excellent
You could be in line for the best loan interest rates
881–960
Good
You could get most, though not all, of the best deals
721–880
Fair
You should have access to loans with reasonable rates of interest
561–720
Poor
You may get accepted for a loan, but with higher interest rates
0–560
Very poor
You may be rejected for a loan or find it hard to get one without very high interest rates
What information is kept by credit reference agencies?
Credit reference agencies collect and keep information about consumers’ borrowing and financial behaviour. The type of information they keep can include:
The electoral roll. This shows addresses you’ve been registered to vote at.
Public records. This includes county court judgements, IVAs, Debt Relief Orders and bankruptcies.
Home repossessions. Information from the Council of Mortgage Lenders about homes that have been repossessed.
Account information. This shows how well you’ve managed existing borrowing and other accounts.
Financial associations. This shows details of people you have a financial association with – in other words, someone you’re linked to through joint finances or a joint credit account.
Previous searches. This shows details of any companies that have looked at information on your credit file in the past 12 months.
Linked addresses. Details of any addresses you have lived at.
How to get a 999 credit score
To get a 999 credit score, you ideally need to have a credit history that spans several years. You might think that if you’ve never borrowed before and never had debt, this will work to your advantage. But in fact this means you’ll have little to no credit history. This can make it difficult for companies to score you as there’s no way of knowing how reliable you are as a borrower.
On the other hand, if you have borrowed before, you’ve never missed a repayment and you’ve always repaid your debt in full and on time, companies will be able to see you have a good track record of sensible borrowing. As a result, you’ll likely have a higher credit score and you’re more likely to get accepted for credit again.
Another way to get a higher credit score is to keep your credit utilisation ratio low. This is how much you currently owe compared to how much credit you have available to you. For example, if you had an overall credit limit of £5,000 and you were using £2,500 of it, your credit utilisation ratio is 50%.
Your credit utilisation is worked out per credit account. The lower it is, the higher your credit score is likely to be. Try to keep your credit utilisation at 25% or below.
Having a low level of debt also works to your advantage.
Why have I been turned down for a loan?
There are several reasons why you could be turned down for a loan. Each lender will have its own set of criteria, but some common examples are as follows:
Not being registered to vote
Negative information on your credit file, such as missed payments
Making too many credit applications in a short time
Having too much debt
Not earning enough
Having a history of county court judgements or bankruptcy
A question mark about your identity or address
Having a financial association with someone who has bad credit
If you’ve been rejected for a loan, it’s worth contacting the lender to ask why. The lender does not have to give you a specific reason, but it should tell you which credit reference agency it used to assess your situation.
Once you’ve found this out, you can contact the relevant agency to get a copy of your credit report. Take a thorough look and if you spot a mistake, write to the credit reference agency to ask for the error to be corrected. You can add a 200-word Notice of Correction to explain a missed payment if needed.
If you have been turned down for a loan, it’s best not to reapply immediately afterwards. Each time you make a full credit application, a “hard” credit check is carried out, which leaves a mark on your credit file for other lenders to see. Too many hard credit searches in a short time can make you look desperate for credit. This can deter lenders from letting you borrow and damage your credit score further.
Instead, try to wait for 3–6 months before applying again.
How can I increase my chances of being accepted for credit?
There are a number of steps you can take to increase your chances of getting accepted for credit. For example:
Check you’re registered on the electoral roll. Lenders use this to verify your name and address.
Pay down existing debt to reduce your available credit.
Check your credit report and get any errors corrected.
Avoid changing jobs before you apply. Lenders like stability, so it works to your advantage if you have been in the same job for a number of years.
Stay at the same address. For the same reason, lenders prefer it if they can see you’ve lived at an address for a long time.
Remove financial associations. If you no longer share finances with that person, you can ask the credit reference agencies to remove them from your credit report.
Use an eligibility checker. This shows you the loans you’re most likely to get accepted for without damaging your credit score further as it only runs a “soft” credit check.
Credit score ranges explained
Credit reference agencies use different score ranges to determine how creditworthy you are. That means both Equifax and TransUnion have different ranges compared to Experian’s, as you can see in the tables below:
Equifax
Score band
Rating
What it means
811–1,000
Excellent
You’re very likely to be approved for competitive credit offers
671–810
Very good
You’re likely to be approved for credit, but won’t necessarily be offered the very best interest rates
531–670
Good
You should be offered credit at reasonable interest rates, but may have a low initial credit limit
439–530
Fair
You have a chance of being approved for credit, but are likely to be charged a high interest rate and have a low limit
0–438
Poor
It’s likely your credit application will be rejected
TransUnion
Score band
Rating
What it means
628–710
Excellent
You’re very likely to be approved for competitive credit offers
604–627
Good
You’re likely to be approved for credit, but won’t necessarily have the best interest rates
566–603
Fair
You should be offered reasonable interest rates, but are likely to have a low credit limit
561–565
Poor
You have a chance of being approved for credit, but are likely to be charged a high interest rate and have a low limit
0–550
Very poor
It’s highly likely your credit application will be rejected
No, this depends on the credit reference agency. Experian’s top score is 999, but Equifax’s is 1,000 and TransUnion’s is 710.
The average UK credit score with Experian is 759. With Equifax, the average credit score is 383 and with TransUnion it’s 610.
Most people won’t have the top score of 999. But remember that any score that’s classed as “excellent” by a credit reference agency will give you access to the best deals.
Your Experian credit score will be accurate, but remember that the 3 major credit reference agencies compile information about your credit in different ways. That means that your credit score varies depending on the agency.
The lowest Experian credit score you can have is 0.
Who is most likely to be researching loan refusal despite a 999 credit score?
Finder data suggests that men aged 25-34 are most likely to be researching this topic.
Response
Male (%)
Female (%)
65+
3.40%
2.32%
55-64
4.99%
2.32%
45-54
9.05%
4.78%
35-44
14.48%
8.03%
25-34
19.72%
11.07%
18-24
13.46%
6.37%
Source: Finder sample of 2,763 visitors using demographics data from Google Analytics
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Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
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