What Is a Good Credit Score and How Is It Calculated?

A credit score is a number — typically between 300 and 850 in the US, or categorised as Poor to Excellent in the UK — that summarises how creditworthy lenders consider you to be. It affects whether you can get a mortgage, a credit card, a phone contract, and what interest rate you'll be offered.

How Credit Scores Are Calculated

The most widely used model in the US is the FICO score. In the UK, the main agencies are Experian, Equifax and TransUnion, each with their own scale. Despite the different scales, the underlying factors are broadly similar:

• Payment history (~35%) — Have you paid your bills on time? This is the biggest factor. A single missed payment can significantly damage a score.
• Credit utilisation (~30%) — What percentage of your available credit are you using? Using more than 30% is generally considered negative.
• Length of credit history (~15%) — How long have your accounts been open? Older accounts help.
• Credit mix (~10%) — Having a variety of credit types (cards, loans, mortgage) can help.
• New credit (~10%) — Applying for several credit products in a short period can temporarily lower your score.

What Counts as Good?

On the FICO scale: 800–850 is exceptional, 740–799 is very good, 670–739 is good, 580–669 is fair, below 580 is poor. Most lenders offer their best rates to scores of 720 and above.

In the UK, "good" varies by agency — Experian's scale runs 0–999 with 881+ considered good, while TransUnion runs 0–710 with 604+ considered good. Check which agency your lender uses.

Practical Steps to Improve Yours

Pay on time, every time. Set up direct debits for at least the minimum payment on every account. Even one missed payment stays on your record for six years.

Reduce utilisation. If you're using 80% of your credit limit, pay it down or request a limit increase. Keeping utilisation below 30% is a quick win.

Don't close old accounts. Closing an old credit card can shorten your credit history and reduce available credit. Keep them open but barely used.

Register on the electoral roll. In the UK, being on the electoral register at your current address is a simple way to improve your score.

Check for errors. Mistakes on credit files are more common than people realise. All three UK agencies give you free access to your report. Review it at least once a year.