Why are credit scores so important and how do you get one?

Credit scores are one of those niggling things that sit quietly in the background of our lives right up until the moment they don’t. From applying for a mortgage to simply setting up a mobile phone contract, a person’s credit profile will always influence the outcome, the interest rate, and all the hoops they’re asked to jump through. With lenders and service providers tightening affordability checks, understanding how credit scores work and how to start building one has become a basic modern life skill.

Why credit scores matter in today’s UK financial landscape

A credit score is essentially a summary of how reliably someone has handled credit and payments in the past. Lenders use it to assess risk and decide whether to approve borrowing, how much to offer, and on what terms. A stronger score can open access to better deals and more flexibility, while a weaker (or “thin”) file can lead to higher costs, smaller limits, or outright rejections.

It’s not just banks either. Many landlords and letting agents use credit checks as part of tenant referencing and will often ask for permission to review a prospective tenant’s credit profile. Utilities can also run checks for certain pay-monthly arrangements, and credit reference agencies are widely used wherever goods or services are provided before payment (think phones, insurance, and some utilities).

How credit scores are calculated and updated

In the UK, the three main credit reference agencies (Experian, Equifax and TransUnion) may hold slightly different information and use different scoring scales, which is why a person can see different “scores” depending on where they look.

While each CRA has its own model, the factors that typically shape credit scores include:

Payment history (whether bills and credit commitments are paid on time)
Credit utilisation (how much of available credit is being used)
Length and stability of credit history (older, well-managed accounts can help)
Recent applications (multiple applications in a short period can look risky)
Public records (CCJs, insolvencies)

Scores also don’t update instantly. Data providers often report to CRAs on a monthly cycle, so improvements may take weeks to show up on a report.

Practical steps to build or improve a credit score

For someone starting from scratch, the fundamentals are refreshingly unglamorous, but they work:

Pay everything on time: Consistent, on-time payments are one of the clearest positive signals in any credit profile.
Keep utilisation low and manageable: Using a smaller proportion of available credit (rather than maxing it out) is generally viewed more positively.
Limit unnecessary applications: Repeated applications can create multiple hard searches, which can temporarily dent a score and raise risk flags.
Build a stable track record: A longer, steadier history helps lenders assess reliability, which is why repeatedly opening and closing accounts can backfire.

Use a credit-building product responsibly:

Finally, for people with limited history, a structured approach can help establish positive repayment behaviour. Taking out a credit building card (a credit card used specifically to increase your credit score) allows a person to work towards their goals of creating a good credit score whilst keeping things manageable.