What is credit scoring?

To help lenders make decisions and assess your application for credit, they use a system called credit scoring. It's designed to predict how likely lenders are to get back the money they lend. 

As part of the credit scoring process, lenders will consider information from credit reference agencies alongside their own lending criteria, including:

Information you provide when you apply

Your account history with the lender

Points are awarded for each bit of relevant information and are added up to get to your credit score. The more points you are awarded, the more likely it is that your application will be successful. The score you need to get an application approved may vary.

You can now view your credit report in the app. Log in to your app and tap on your customer icon in the top right of the screen to access your profile and select ‘Know your credit score’ from the list.

Alternatively, You can request a copy of the information from one of the three credit reference agencies holds on your file. You’ll need to give them your title, name, date of birth and address. You can find further details in a leaflet from the Information Commissioner's Office called Credit Explained.

The main credit reference agencies in the UK are Equifax, TransUnion and Experian. These agencies keep records to help lenders like us assess credit applications.

Their records include information such as:

Your electoral register status

If you’ve been made bankrupt or insolvent

If you have any County Court Judgments and Court Decrees

Any current and previous borrowing you have and the way you managed these accounts

Any credit reference searches carried out by other companies

The names of anyone you’ve made a joint application with or have a joint account with, or the names of people you’ve told the credit reference agencies you’re financially associated with.

This information goes into your credit report (also called your credit file).

This can happen for a number of reasons. Some of the most common reasons are:

You missed a payment or made a late payment

You made a new application for credit

There was an increase in credit utilisation

You recently closed an old credit account

If you're concerned about why your score has dropped, it's a good idea to check the information held on your credit report. If you see any inaccuracies you can dispute them with the data provider.   

There is no set minimum credit score needed to get a mortgage, but your credit rating must be considered good enough by your provider. Essentially, the higher your credit score is, the better your chances are of being offered a better deal on a mortgage.

A mortgage decision is not necessarily based on a score provided by a credit reference agency, as they are likely to have their own scoring criteria inclusive of income and how much of it is disposable.

You can check your score for free with the three main credit agencies - Experian, Equifax and TransUnion. These agencies will give you an independent score based on your credit report. 

Lenders base their decisions on different factors, so if one lender turns you down, it doesn't mean everyone will.

It’s worth remembering every time you apply for credit, it’s recorded on your credit report and some lenders see a large number of applications in a short period of time as a reason to turn you down.

There are a few reasons why sometimes we might not be able to lend you money: 

Insufficient income

The credit that you’re applying for may be unaffordable due to your income or outgoings.

Past repayment problems

You may have been made bankrupt in the past, missed payments or have a County Court Judgement against you.

Missing information

We may not have received the correct level of information about your income or outgoings when we assessed your application.

Too much borrowing 

You may have too much borrowing with us or other banks and building societies.

The only way to find out why you have been declined credit is to contact the lender who declined you.