Martin Lewis challenges the myth of universal credit scores in the UK

In the UK, it has become increasingly clear that the common notion of a universal credit score is a misconception. Martin Lewis, founder of MoneySavingExpert.com, addressed this myth, stating that individuals actually do not possess a single credit score recognized across all lenders. Instead, what people see is merely an approximate idea of how various lenders may view them based on the different scoring systems employed by credit reference agencies. The explanation provided by Lewis highlights an important aspect of the credit system in the UK, which does not rely on a singular score for decision-making. Each of the three major credit reference agencies in the UK maintains its own scoring guidelines, and the scores they provide are not seen by lenders when individuals apply for credit. Instead, lenders evaluate applicants based on their credit files or reports. Lewis further emphasized that while maintaining an eye on one’s credit score can help in identifying any inaccuracies or incomplete information that could potentially hamper future credit applications, it is not the score itself that holds value. Rather, it is the detailed information contained within an individual’s credit report that is crucial. Factors such as payment history, indebtedness, and any linked accounts can significantly affect the creditworthiness perceived by lenders. Moreover, he reassured individuals not to fret over minor fluctuations in their credit scores. Small changes, such as a decrease in available credit after a credit card cancellation, can either positively or negatively impact scores but should not cause alarm unless the score takes a significant drop. In cases of larger reductions, such as a 150 to 200-point drop, more serious attention is warranted because such changes often indicate underlying financial issues or inaccuracies that need addressing.