Improve your credit score

Many people believe every element of their life is on their credit reference files, but actually it's mainly just a strict set of financial data. Though over recent years, the information contained on them has grown.

So let's debunk some myths. Here are a few of the more common things people think are on their files, but aren't.

The idea that getting accepted for credit is all based on a simple score given to you by one of the credit reference agencies is false. At best, it's a guide to roughly how good or bad a risk you are. As we say above, lenders will judge you on three main criteria when you apply for credit:

• Your application details. For example, your salary.
• Any past dealings you've had with that lender. For example, old accounts. 
• The info contained in your credit reference reports.

Yet the first two aren't factored in to your credit score – so it's based on incomplete information. Plus, different lenders are looking for different things. When you apply, they assess you based on their own 'ideal customer' scorecard – and each lender is different. Just because one lender rejects you doesn't mean another will do the same. So bear in mind:

• Rather than thinking "I have a great credit score so I'll get any credit I apply for", it's actually best to check how you stand with different lenders before you apply. A way of doing this is to use our credit card and loan eligibility calculators. That way, you'll have a better indication of which lenders are likely to accept you (and there's no impact on your ability to get credit, as there would be if you applied directly).
  
  
• If you get lots of high percentages then you're doing reasonably well – but NO ONE is ever likely to be accepted for every card or loan. If our calculator shows you're not likely to be accepted for many cards or loans, see our tips to boost your creditworthiness. 
  

The impact of a slight credit score drop is near meaningless

For those looking at their score and wondering 'what is a good credit score', it's helpful to understand that each of the credit reference agencies has a different scoring range. These are as follows:

- Experian: 0-999
- Equifax: 0-1,000
- TransUnion: 0-710

Where the top credit scores are 999, 1,000 and 710 respectively, zero is theoretically the lowest score – though in practical terms it's impossible to get. If you've got no or little credit history, your score won't be zero by default, rather, your credit score simply won't exist (it'll only be generated if you go on to apply for credit).

These scoring ranges are the same even if you're not accessing your score directly from the credit reference agency itself – for example, you're using Clearscore to check your Equifax score, or Credit Karma to check your TransUnion score.

Anyone with a credit score should consider it inevitable that their score will drop or fluctuate at some point. This shouldn't be a cause for panic though, especially if it's only a slight dip. In general, the impact of your score going down a small amount is near meaningless. Have a watch of this video to see why: 

When you apply for a product, it isn't just a case of assessing whether you're desirable, but also checking the application is legitimate. So, as well as the credit reference agencies, lenders also use completely separate anti-fraud agencies to try to weed out problems. For more information on ID fraud protection, see our Free ID fraud help guide, but here is how the two big agencies work: