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What it means if your credit score band is "Fair"

If your Experian or TransUnion credit score falls into the "Fair" band in the UK, it means your score is right in the middle of the credit score range. This can show that you have a moderately good credit history and profile from the perspective of lenders.

However, for Equifax the “Fair” band is below “Good”, and more similar to the “Poor” one that Experian and TransUnion have. Confused? Here’s how it works.

What does a “Fair” credit score mean?

If we’re talking about the Experian or TransUnion credit score ranges, a "Fair" credit score tells lenders that you are a responsible borrower but you have occasionally struggled with the past. It just wasn’t anything too serious – perhaps a few missed payments, or even a default that happened long ago but from which you’ve recovered.

However, it can be confusing to interpret it correctly because of how different credit reference agencies label it:

To be clearer, a "Fair" credit score in the UK falls within these ranges:

  • Experian: 721 - 880 (out of 999);
  • TransUnion: 566 - 603 (out of 710);
  • Equifax: 439 - 530 (out of 1,000).

Because of this, you might want to think of the “Fair” credit score band on the Equifax scale as simply “Poor”, and think of their “Poor” credit score band as “Very Poor”, which is what TransUnion and Experian use for the lowest credit score band.

So if you’re checking your Experian score or your TransUnion one, a “Fair” credit score is average. It’s also a sign that you should hold off from making any credit applications in the very near future and work on your credit score so you can qualify for better deals and terms.

What does a “Fair” credit score mean for my borrowing?

Having a "Fair" Experian or TransUnion score means you are viewed as a moderate-risk borrower by lenders. This can impact your ability to access credit and the terms you are offered in the following ways:

  1. You may have a better chance of being approved for loans and credit cards compared to those with "Poor" or "Very Poor" scores, but you may not qualify for the best interest rates or credit limits.
  2. A "Fair" credit score may make it more challenging to get approved for a mortgage or secure the most favourable terms. Lenders may view you as a higher risk borrower.
  3. You may receive credit card offers, but they may come with higher interest rates, lower credit limits, or less favourable promotional terms than those offered to borrowers with "Good" or "Excellent" credit.
  4. Landlords and letting agencies often check credit scores when evaluating rental applications. A "Fair" score may make you a less attractive tenant compared to those with higher scores. For competitive rental markets, you might end up getting refused.
  5. Some insurance providers use credit scores as a factor in determining rates. A "Fair" score could lead to higher premiums for car, home, or life insurance.

In other words, a "Fair" credit score puts you in an awkward position financially: you might qualify for the loans, mortgages, and credit cards that you want, but you might not go ahead with your application as the terms are not ideal.

This can even make your problem worse, as making too many loan applications can further lower your score – regardless of whether you accept the offers or not.

The main challenge, however, will be the total cost of the loans. Your interest rates will be higher, and this can add to quite a bit, especially for large loans. For example, a small jump of 1% in APR for a fairly average £500,000 mortgage taken for 30 years can add up to almost £90,000 over the entire life of the mortgage. That’s a huge amount to pay simply for having made a few mistakes in the past.

And, of course, if you’re looking at the Equifax credit score, being in the “Fair” credit score band might come with even higher APR increases.

This is why it’s so important to continue working on your credit score and to not let labels like “Fair” confuse you.

The good news is that now there are many apps that can help you build and improve credit. One such app is Wollit.

Wollit is available on both iOS and Android, and it reports your monthly subscription as loan repayment to all three main credit reference agencies, helping you maintain and even improve your credit history, which is the main factor that matters for your credit score.

Eventually, you should be able to move into a less “average” credit score band and save hundreds of thousands of pounds in interest.

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Terms apply. Results may vary. Improvements to your credit score are not guaranteed. Wollit Credit Builder plans are unregulated.