Check my credit score > Is 640 a good Experian credit score?

Is 640 a good Experian credit score?

Wollit Team4 minutes read · Updated 15th November 2024

Your credit score of 640 falls into the second lowest credit score band with Experian, UK’s largest credit reference agency. This band is called “Poor”.

What does a credit score of 640 mean?

In the UK, credit scores are calculated by three main credit reference agencies: Experian, Equifax, and TransUnion. Each agency has its own way of calculating credit scores, which means that if you check your credit score with all of them, you’ll probably have not one, but three credit scores.

These agencies also split their scores into different bands to help people understand how lenders see them.

A “Poor” credit score is the second lowest possible rating that you can get with Experian. Your credit score is in this band if it’s between 560 and 720. TransUnion has a similar band, also called “Poor”, although their credit score range is different (0 to 710 instead of 0 to 999 as it is with Experian). Equifax has a similar band called just “Fair”, however, and it’s for scores between 438 and 530 on their own scale.

In other words, if you’re checking a score of 640 there instead, it means something else entirely. We’re only looking at the Experian score in this guide, since it’s the largest agency and one that most people are familiar with. You can easily get your Experian credit score for free, too.

With Experian, a “Poor” credit score tells lenders that you have struggled with debt in the past and might even still be struggling with it. This is usually because of more serious issues – a large number of missed payments, perhaps even a few defaults, or maybe even a CCJ. Since it’s not the absolute lowest credit score band, it can also mean that you might be on the path to put these issues behind you as time passes.

What does a credit score of 640 mean for my money?

Having a “Poor” Experian score means that lenders see you as a high-risk borrower. Here are some of the things that you can expect to happen:

• Lenders may be less likely to approve you for credit products.
• Even if you are approved for credit, you may be offered higher interest rates, which can make your loans more expensive and require you to pay more back in interest.
• You may be offered lower credit limits, making it harder to cover an unexpected bill or emergency. To make matters worse, low credit limits can further damage your credit score by themselves, for example, by maxing out a credit card.
• Landlords and letting agencies may also be less likely to rent to you.
• Insurance providers may also charge higher premiums for car, home, or life insurance.

In other words, having a “Poor” credit score can mean that you’ll either get refused or get some of the worst deals on the market. You might also be forced to only deal with shadier payday lenders instead of trusted high-street banks.

The main challenge, however, will be the total cost of your loans. Poor credit credit cards and loans usually come with very high APRs, often above 50% per year. This can make your debt problem worse and add tens or even hundreds of thousands of pounds in extra costs over your lifetime.

How to improve a credit score of 640?

If you have poor credit you should approach debt in a very careful way:

• Try to get help from family and friends first. Just make sure to treat these loans a bit more formally so as to not ruin your relationships as well.
• Hold off from making new credit applications for a while. You should also try to avoid taking loans from lenders that advertise themselves as accepting people with poor credit scores. There’s always a high cost hidden in the fine print.
• And don’t give up on your credit score; in fact, keep working on it.

The good news is that now there are many apps that can help you rebuild and repair 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 improve and repair your credit history, which is the main factor that matters for your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report which shows lenders that, despite your poor credit score, you do pay your bills on time, helping you eventually reduce the impact of your past mistakes in your overall credit file.