Credit score guide to personal loans

Credit score guide for personal loans

Understanding and managing your credit score can help you make sounder financial decisions. Here's our rundown of what you need to know.

This guide explains what makes up your credit score, how it’s calculated and the different factors that can affect it – like your payment history and how many credit applications you’ve made. It will also help clarify how lenders and brokers like Post Office use your score to decide whether to approve your personal loan application. And finally, includes a few simple steps you could take to optimise your credit score.

Exactly what is a credit score?

Your credit score is a rating based on your personal financial history. It helps lenders decide how creditworthy you are. There are three credit reference agencies (CRAs): Experian, Equifax and TransUnion. They take your financial history and use it to put together a credit report. The information in that report is then used to create a credit score for you.

What does Post Office do with my credit score?

Before saying yes to a personal loan, Post Office has to make sure you’re not too much of a risk; that you’ll pay back the loan in full and on time. Post Office contacts agencies like Experian to get your credit score, which shows how well you’ve managed the credit you’ve been given so far.

Why is it important to have a good credit score?

The higher your credit score, the less of a risk you are to lenders. If you use credit regularly and responsibly, it’s likely you’ll have a high credit score. Remember, your score isn’t set in stone. It can go up or down, depending on how you’re managing the credit you have right now.

Experian, Equifax and TransUnion have different scoring ranges. Experian will give you a score out of 999, Equifax 700, and TransUnion 710. Your score might be different with each agency. It’s possible to have two different scores from two different agencies that indicate you’re a good credit risk.

What impacts my credit score?

All sorts of factors, including the number of credit applications you’ve made. That’s why it’s important to check the likelihood of being approved for a loan before you go ahead and apply. If you’re looking at a Post Office Personal Loan, use our Fast Checker to check your eligibility without affecting your credit score in any way. A soft search won’t impact your credit history, and only takes a couple of minutes.

What’s more, you can use the Post Office Personal Loan Calculator to see our typical repayment options.

Here are some other factors that can affect your credit score:

  • Your payment history – this includes missed payments, defaulted payments and any County Court Judgement (CCJs), and carries the most weight when it comes to determining your credit score.
  • Your address history – how long you’ve lived at your current address, and any linked addresses you’ve lived at during the past seven years – up to 10 if you’ve been declared bankrupt.
  • Whether you’re on the electoral roll – this helps lenders determine you are who you say you are.
  • Signs of fraud – things like identity theft and card fraud can damage your credit history but you can take steps to repair it. We’ll come to those in a minute.
  • Credit utilisation – how much you currently owe, and how much of your available credit you’re using. If you use a high percentage of the credit available to you, it might indicate that you’re experiencing financial difficulties. It can also potentially damage your credit score.
  • The length of your credit history – how long you’ve had your various credit accounts.
  • Your credit mix – managing a range of accounts like mortgage, personal loan and credit card, shows lenders you can handle different types of debt at once.


Can I do anything to improve my credit score?

It is possible to optimise your credit score. The first thing to do is check your credit report with the three agencies and pinpoint what may be dragging your score down. You can see your score and request a copy of your full credit report at any time. Some services are free, but you’ll need to pay a small fee for others. If there are any mistakes or entries that need to be updated, you can dispute them.

Here are a couple of simple ways to boost your credit score:

  • Make sure you’re on the electoral roll.
  • Lenders look for stability in borrowers. When you register to vote, you go on the electoral role. To get on it, you give details like your name, address, date of birth and your electoral number. It’s an easy way for lenders to confirm your identity and the accuracy of your details.
  • Be more reliable when it comes to paying bills
  • Lenders loan money on the understanding that you’ll make regular repayments. Simply paying your bills on time, every time, will help boost your credit score long-term.

Check if you're eligible for our personal loans without affecting your credit score

Small print

Post Office ® credit cards, personal loans and overdrafts are provided exclusively by Bank of Ireland (UK) plc.

Post Office Limited is a credit broker and not a lender. Post Office Limited is an appointed representative of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Post Office Limited is registered in England and Wales. Registered Number 2154540. Registered Office: Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ. Post Office and the Post Office logo are registered trademarks of Post Office Limited. Our FCA Register number is 409080. You can confirm our registration on the FCA's website ( in new window).