What is a credit score and how to improve it

What a credit score is

A credit score is a number or rating that sums up your borrowing history: what you've borrowed, whether you paid on time, and how much you owe now. Lenders, such as banks, card companies and mortgage providers, use it to decide whether to say yes, how much to lend and sometimes what rate to charge.

The score is built from your credit file (also called a credit report): the record of your loans, cards and payments that lenders share with a credit agency. The file is the facts; the score is one company's way of turning those facts into a number.

There isn't one worldwide system. Who keeps your file, what goes in it and whether you get a score at all depends on the country. The three you are most likely to meet are below.

The Netherlands: BKR registration, not a score

In the Netherlands, credit history is kept by Stichting BKR (Bureau Krediet Registratie), a central credit register. Lenders report your loans to BKR, and BKR shares them with other lenders when you apply for credit. BKR itself doesn't judge your application: the lender decides, using its own rules, and lenders must check your BKR data before they lend.

What BKR records, according to its consumer site:

• Positive registrations for credit of more than €250 that runs longer than one month, reported when the credit is granted.
• Negative registrations during a loan, for example when you fall behind on payments or the lender demands full repayment early.
• Personal details such as your name, date of birth and address, and loan details like the amount, start date and end date.

After you repay a loan, your data stays visible for 5 years. That includes any arrears that were registered along the way.

Note that "positive" here only means a normal loan that is running as agreed. BKR says a positive registration can help you, while past arrears may make a lender more cautious. Either way, a lender can see what you already owe when it decides how much more you can borrow.

How to check yours for free: log in at mijnkredietregistratie.nl, BKR's site for consumers. Viewing your credit overview online is free. The first time, you identify yourself with iDIN through your bank. If your bank doesn't support iDIN, you can send a form with a copy of your ID instead, and the overview comes by post. BKR also sells a certified overview by post for €17.50, which you only need if someone asks for an official copy.

Buy now, pay later is changing. Under the EU's revised Consumer Credit Directive, the Dutch government announced that buy now, pay later providers will need an AFM licence and must run a credit check, including a BKR check, before lending. Those rules are due to take effect by 20 November 2026, though the exact start may slip, so check the current position before you rely on it.

The UK: three agencies, three scales

In the UK, your credit file is held by credit reference agencies. The three main ones are Experian, Equifax and TransUnion. Lenders may report to one, two or all three, so your files can differ slightly.

Each agency works out its own score on its own scale. Experian's score now runs from 0 to 1,250. Equifax and TransUnion use different scales, and those have been changing too, so a "good" number at one agency can't be compared directly with another. Lenders also use their own scoring and don't see the score you see.

How to check for free: you have a legal right to see the data an agency holds on you, often called a statutory credit report. Experian also offers a free account where your score updates every 30 days, and it says checking your own score won't affect it. Equifax and TransUnion have their own ways to see your file, so check their sites. Be careful with "free trials" that turn into paid subscriptions.

The US: FICO Score from 300 to 850

In the US, the best-known score is the FICO Score, which runs from 300 to 850. Higher is better. FICO says its score is built from five parts:

How to check for free: the official site is AnnualCreditReport.com, where you can see your reports from Equifax, Experian and TransUnion for free once a week, according to the US Consumer Financial Protection Bureau. Other sites that advertise "free" reports may try to sell you something.

A worked example: what "using less of your limit" means

One factor that shows up across systems is how much of your available credit you're using, often called credit utilisation. It's your card balances divided by your total card limits.

How to improve your credit record

The details differ by country, but the same habits help almost everywhere:

1. Pay every bill on time. Payment history is the biggest single factor in FICO's model, and a late payment can be registered in the Netherlands as well. A direct debit for at least the minimum makes sure you never miss one.
2. Use less of your limits. Keep card balances well below the limit and pay them down where you can. Our snowball vs avalanche calculator shows how quickly a plan can clear them.
3. Apply for credit only when you need it. Each application can leave a mark on your UK file, and lots of applications close together can look like money trouble.
4. Check your record once a year. Look for loans you don't recognise, wrong addresses or payments marked late that weren't. In the Netherlands, ask the lender to correct a wrong BKR registration (its contact details are shown next to the registration in your BKR overview); in the UK and US, raise it with the agency or the lender.
5. Give it time. Negative marks fade with age. In the Netherlands they disappear 5 years after the loan is repaid.

Common mistakes

• Paying for something that's free. You can see your own record for free in all three countries. Read the small print before signing up for a paid monitoring service.
• Taking a card just to "build credit". It only helps if you repay in full and on time. Interest at 20% or more can cost far more than any benefit. See good debt vs bad debt.
• Borrowing just to have a record. In the Netherlands, BKR only records credit you actually have. Taking a loan you don't need simply to appear in the register adds cost and adds to what lenders see you already owe.
• Ignoring a missed payment. If you're struggling, contact your lender before you fall behind. Our guide to paying off debt fast lists free help.