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What is a Credit Score?

What is a Credit Score?

This guide will help you understand your credit score, from how it’s calculated to "some few simple" ways to manage it and increase your borrowing options.
 

Credit Score explained

What is a credit history?

Your credit history is the complete record of your borrowing and repayments. It includes information about credit cards, utility bills, and even your mortgage.

Any time you apply for a financial product or service, your prospective lender will check your credit history with at least one of three major credit bureaus – Equifax, Experian or CallCredit. These companies build up a picture of your credit worthiness by analysing bills you have paid, loans you take out and credit card you use.

That history is used to give you a personal credit score, which lenders will be able to see when deciding on your applications for new products.

What does my credit score say about me?

Your credit score is an important measure when creditors decide whether to lend you money, let you open an account or take out a credit card. When a lender looks at your credit score they are looking to see how reliable you are when it comes to paying your bills and repaying debt. This information helps all lenders decide whether or not to take you on as a customer.

The more financial information that credit bureaus collect, the more robust and reliable your credit score. Bureaus are sent information on how much you borrow, whether you pay bills on time, and what percentage of outstanding debt you repay. Each of these pieces of information contributes to an overall credit score.

 

What’s a Credit Score?

How do I improve my Credit score?

Although most information stays on your credit report for a long time, there are still a number of ways to improve your score.

  • The easiest way to build a good credit record is to stay on top of your finances and make repayments on time. Missed repayments are a surefire way to damage your credit score, so set up direct debits or reminders on your mobile to make sure you don’t miss them.
  • It’s a good idea to check your credit reports with one or all of the three credit bureaus in the UK – Equifax, Call Credit, and Experian.
  • If you’ve moved home recently or just relocated to the UK from another country it’s a good idea to make sure your information is up to date and there are no errors on your file.
  • You should also ensure you are registered to vote and are listed on the electoral role. This is often overlooked but is vital to your credit score.
  • If you’re not eligible to vote but would like to apply for credit in the UK it might be worth sending proof of residency documents to the bureaus.

More about Credit score

Your credit score can go up or down for many different reasons, not all of which are immediately obvious. Failure to make a monthly payment could not only result in being charged penalty fees but may also have a negative impact on your credit score.

However, the more ‘good’ activities are recorded in your credit report, the less impact poor credit performance in the past will have. That’s why it’s important to make sure you pick the right card to suit your own personal spending habits.

For example, a charge card that requires you to pay the balance in full every month can be a good way of bolstering your credit score, as long as you stay on top of repayments.

 

Choosing a Card to suit your needs

When you’re choosing a Card it’s important to think of your spending habits.

  • Credit cards allow you to spread the cost of your purchases as long as minimum regular payments are made. However, not paying your balance in full will mean you will pay interest charges on your spending.

  • Charge cards, on the other hand, allow you to collect rewards on your spend but require you to pay the full balance every month.

  • American Express cards are a secure way to spend, with all transactions protected by intelligent security software.

  • At American Express we’re proud to offer world class customer service, accessible globally 24/7.

Find out more about our selection of Cards and discover the one that suits your financial needs.

Choose a Card Type
 

Credit and Charge Cards Explained

Has talk of interest, annual fees, rates and percentages left you feeling confused?

Our simple Credit and Charge Card guides are a great place to start.

How Credit Cards and Charge Cards work

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Where is American Express accepted

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What is surcharging

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Using your Card Abroad

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What Credit Card fees am I expected to pay

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What is Credit Card Interest

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What is Credit Limit

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How to choose a type of Card

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What is a Charge Card

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How to pay off your Card

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How to apply for a Credit Card

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American Express Benefits

FRAUD AND SHOPPING PROTECTION

Your security and protection are our priority. Our technology has been designed to give you peace of mind when using your card

Learn More about Fraud Protection

WORLD CLASS CUSTOMER SERVICE

Access to our customer service is available 24/7 by phone, text or email.

Learn More about Customer Service

CONTACTLESS PAYMENTS

Contactless is the quick, easy and secure way to make payments - Simply touch your American Express Card on the reader, wait for the beep and you're done. What's more, with Amex pay and Apple PayTM you can even pay with your phone.

Learn more about Contactless Payments
 

Explore Our Credit Cards

American Express Offers a range of Credit Cards with different rewards and benefits tailored to your lifestyle and interests.

5% cashback will be payable to you by us on all your purchases made in the first three months up to £125. Introductory offers are not available if you currently hold or have held any other Platinum Cashback American Express Cards in the past six months. Any cashback from introductory offers will be credited to your Account in your card anniversary month. Your Card anniversary month is the one month period each year following the date on which your Account was opened. Cashback is not earned on Balance Transfers, Cash Advances, American Express Travellers' Cheques, Foreign Exchange transactions, interest, any spending in excess of your credit limit, charges for returned payments, late payment or referral charges and American Express Credit Card finance charges. You will earn cashback at the rate of 0.5% cashback at warehouse retailers in the United Kingdom. You can find out which retailers we treat as warehouse retailers by checking the FAQ section of our website (americanexpress.co.uk).

Terms and Conditions apply. Please see the Insurance Terms and Conditions for full details. Please read this to understand the limits and exclusions that may apply.