UK Credit Scores: The Complete Guide For New UK Residents

It’s not always easy to manage your money in a new country. From opening a bank account to accessing credit, there’s a lot you need to think about — and building a credit score is essential for any newcomer to the UK.

In this guide, you’ll find out what a credit score is, why you need one, and how you can overcome the key challenges in building a credit score as a new resident in the UK.

What is a credit score and why is it important?

Your UK credit score is based on your previous financial history. It’s designed to show money lenders how reliable you are when it comes to making payments, so they can assess whether to lend you money or offer credit. It might also be used as a reference check when you apply for a job or rent a flat.

In the UK, your credit score is measured and assigned by a credit reference agency. Credit lenders can then access your credit score to decide whether to loan you money.

Credit is necessary for many large purchases in the UK, such as buying a car or getting a mortgage. So if you’re planning to stay in the UK for a while, it’s important to start building your credit score as soon as you can.

The challenges of building a credit score as a new UK resident

New UK residents face more challenges than UK citizens when it comes to building a credit score. That’s because you can’t bring your overseas credit score with you when you move — you’ll need to start from scratch to build a credit score in the UK.

Without a credit history to draw from, lenders won’t know whether you pay your bills promptly. They can be reluctant to offer credit or lend money, because they don’t know whether you’ll pay it back on time.

One of the best ways to start building credit is to register on the electoral roll — but not all UK migrants are eligible to vote. In fact, only British, EU, and Commonwealth citizens can register on the electoral roll (as well as citizens from some other countries if they live in Scotland or Wales).

Many newcomers to the UK also find it difficult to balance their religious or cultural values with the standard UK finance system. This makes it hard to take advantage of credit builder schemes and other bank accounts (although there are some ethical banks which take these concerns into account).

But while there are challenges to overcome, it’s still possible to build a strong credit score as a new resident in the UK. You simply need to understand the system and what steps you can take to build your credit score.

The rise of the credit invisibles

It’s not just migrants who have a hard time building credit. Young people who haven’t had time to build a credit history, older people who prefer cash-based transactions, and those who have already paid off their mortgage are also part of a group known as credit invisibles.

A recent Experian report suggests there are more than 5 million people in the UK who don’t have enough of a financial track record to create a credit score.

What is a credit reference agency (CRA)?

A credit reference agency tracks your credit history, and uses it to assign you a credit score. There are three CRAs in the UK: Experian, Equifax and TransUnion. Each CRA categorises credit scores into five bands.

Here are the current CRA credit ratings and scores at a glance:

Because there’s no single universal credit score range, it can be difficult to understand and track your credit score. A score of 700 is Good with Equifax, but Poor with Experian, so don’t assume a single score applies across all CRAs.

The best way to track your credit score is to sign up for a credit report with each CRA. These are usually free for an initial period, before you’re required to pay monthly. So we recommend taking steps to build credit at least a few months before you sign up for your credit report. This can be especially useful leading up to a big purchase where you'll need a loan, like a car.

What is a credit report and what does it show?

Credit scores are designed to simplify and standardise your credit report. Credit reports are more in-depth, and hold a lot of personal and financial information about you. When a lender applies to see your credit report, they’ll see:

• Your name, address, and date of birth
• Previous credit applications (and whether they were successful)
• Credit repayment history (including late or missed payments)
• How much debt you currently owe in the UK (excluding student loans)
• Whether you’re on the electoral roll
• Your credit cards and loans (including joint accounts)
• County court judgements (CCJs) against you
• If you’re bankrupt or have an individual voluntary arrangement in place
• Your current account turnover

Lenders use all this information to decide whether or not to offer you credit. Employers and landlords can also use it to decide whether to offer you a job or allow you to rent their house or flat.

6 ways to improve your credit score if you’re new to the UK

As a newcomer to the UK, here’s what you need to do to improve or start building your credit score:

1. Request a copy of your credit score from your home country

While credit lenders won’t see your international credit score when they search within UK CRA databases, you can send it to them directly. They don’t have to use this information, but it may help them decide that you’re a reliable loanee if you don’t have any other UK credit history.

2. Open a UK bank account

All UK residents can open a UK bank account — you just need to be 18 or over, and provide an address, as well as proof of residency (such as a valid type of UK visa).

3. Receive your wages to your UK bank account

Deal in cash as little as possible. Make sure your employer pays your wages into your bank account, so credit lenders have a broad view of your income.

4. Get an interest-free credit card

Interest-free credit cards allow you to borrow small amounts of money and pay them back within a set amount of time. This is a great way to build a credit score, as it proves you can repay loans on time without being charged interest.

5. Register on the electoral roll (if you’re eligible)

If you’re a Commonwealth or EU citizen with permission to stay in the UK, you can register on the electoral roll. This also makes you eligible to vote. Register on the government website.

6. Use electronic money institutions

Using financial technology is a modern way to boost your credit score. Financial apps that enable you to share and save money can help you prove your creditworthiness to lenders.

5 things you may not know about applying for credit in the UK

• Credit applications can affect your credit score. If you’re refused credit more than a couple of times, don’t keep applying. Other lenders can see these refusals and it may make them less likely to offer credit. Instead, take a little extra time to improve your credit score.
• Fraud and identity theft is shown on your credit report. If you’ve been a victim of identity theft, make sure you log the details with the police, so you can provide information about the issue if asked.
• Having a UK mobile phone contract can improve your credit score. Sign up for a contract with a UK mobile provider and ensure you pay your phone bill on time every month to boost your credit score.
• It takes a long time to build credit, so start as soon as you can. It usually takes at least a few months to see changes to your credit score. That’s why you should take steps to build your score as soon as you can after arriving in the UK.
• Giving trusted businesses access to your banking transactions can boost your credit score. Products like Experian Boost, which track your subscriptions and direct debits, can sometimes signal your creditworthiness to CRAs and lenders.

Learn more about building credit and money management in the UK with Bloom

Bloom’s money club app is designed to help newcomers to the UK build wealth. Giving you the tools to get a great credit score is part of our mission. Learn more in our credit score FAQs.

Find out more about building credit and managing your money in the Bloom Learning Hub.