How Are Credit Scores Calculated?

Credit Score Calculation | LoanTube

‘How is my credit score calculated’ is one of the most common questions we often ponder upon. With 3 major credit score providers operating here in the UK, what makes the credit score calculation even more tricky is the fact that each organisation puts greater emphasis on certain aspects to create your score than others. So, it’s not surprising that your score will vary from provider to provider.

The simplest way to explain what goes into building your credit score is to look at each element separately as they all work to create a bigger picture of your financial situation. Each credit score company sees certain elements as more important than others do, but one thing they have in common is that they all use the list below to provide you with your credit score.

Personal Information

Lenders want a clear picture of who you are and your current personal situation, so your credit score is calculated by capturing data on your address, marital status, if you have any dependent children, your salary and whether you rent or own your own home.

Credit History

Lenders always need to assess risk when lending money to anyone, so they use your financial behaviour in the past to decide if you’re a good candidate for lending in the future. A good score is given to those that have manageable levels of debt that service the outstanding amount on a regular basis.

Likewise, those who are struggling to make repayments and are missing payments are considered as more of a risk and likely to be given a lower score given their financial history.


Those with lower numbers of enquiries into their credit file are seen as being in better control of their finances whereas those who are receiving regular searches are cause for concern.

‘Hard’ enquiries are always undertaken by lenders to check out a prospective borrowers credit history and suitability for credit, and they can have a short-term impact on credit scores. If you’re having a large number of enquiries into your history, this is perceived by lenders as your seeking yet more credit, which can be worrying.

Therefore, the amount of enquiries on your account in the last three months is always taken into account when creating your credit score.

Public Records

Credit scores also look into public records to see if you’ve been subject to bankruptcy, CCJ’s or insolvencies, and there’s no hiding from this information if it exists in the public domain.

On the plus side, being registered on the electoral roll is seen as positive for your credit score, so make sure you keep this information up to date should you move home.

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