Although most finance providers use their own rating systems to determine what they consider a good credit score, the 300 - 850 scale is most common. A score of 700 or over would be deemed as good, and over 800 would be considered excellent.

When lenders are deciding whether or not to accept your application for a loan, mortgage, credit card or any kind of finance, they are most likely to use this 3 digit scoring scale. A good credit score will, of course, give you more chance of being approved by the lenders, but it can also help you get the best interest rates.


What factors make a good credit score?

Now that we know what a good credit score looks like, it’s worth talking about what factors make a good credit score. There are several things to consider, and each of them can give you a boost to achieving a better credit score.


A stable employment history

Being able to show a stable employment history is an important factor when a finance provider is determining your credit rating. It makes perfect sense for lenders to check this, as they want a historic insight into you and your employment to date. It helps them get a better picture of the applicant.

A person with a consistent, unwavering employment history will be regarded as lower risk than say, someone with an employment history that has many changes and perhaps periods of unemployment. Every lender worth their two cents will consider this when trying to decide if an applicant merits a good credit score.


A long-established credit history

Another important factor that will be taken into account when lenders are making judgements on credit scores is your credit history. Applicants with a long-established credit history with loans, credit cards, mortgages that show very few or no missed payments will be considered lower risk.

It’s also important to note that having no credit history is not such a good thing in the eyes of lenders. Although it’s a little strange to say it, but having a history of debt is a good thing. Just as long as that debt is managed well.

Lenders can see that you’ve had borrowed before and have managed it well, so this would be another factor towards gaining a good credit score. An applicant with a no credit history, or a very short one would be considered a little risky; as the lenders can’t get an insight into how well that individual manages debt.


Consistent residential status

Lenders especially like to know where an applicant lives, both presently and historically. They look favourably on individuals who can exhibit a steady resident status. People that hold a good credit score are likely to have lived at the same property for a number of years, either as the home owner or as a long term tenant.

Another factor that will point you in the right direction to getting a good credit rating will be whether or not you are on the electoral roll. It’s one of the first things a lender will check, so if you haven’t registered yet, it might be a good thing to do.


Although this is not a definitive list, it is important to know about these factors and what impact they have on whether or not you can expect to receive a good credit score. Each lender is different but you can expect that they all will consider these factors.


Posted 21/10/2016 Back to Blog

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