What Is a Bad Credit Score vs Poor Credit Score?

Whether you’re looking for car financing, a mortgage or loans, credit scores are essential for borrowing. That’s because your credit score shows how well you’ve managed credit in the past (your credit history), giving lenders a sense of your reliability as a borrower.

When it comes to credit scores, the terms ‘bad’ and ‘poor’ credit can be used interchangeably. But they often mean slightly different things.

So, let’s recap the key questions – “what is a poor credit score”, “what is a bad credit score”, and “how much do they matter when you’re applying for car finance or other credit”?

What is a credit score and why does it matter?

A credit score is a three-digit number or rating. It’s based on your financial history and reflects how reliable you are at repaying and managing your money. 

There are a number of factors that impact your credit score. These include everything from your repayment history, reliability, credit usage and the length of your credit history. Knowing your score gives you a better idea of how lenders may view you as a borrower.

Your credit score impacts your ability to access certain finance agreements. A lower credit score can make it harder to access better deals and interest rates. Thankfully, there are easy ways to improve your credit score over time.

There are different credit reference agencies, but three of the biggest in the UK are Experian, Equifax and TransUnion. These agencies have a different credit score range, meaning you’ll have a slightly different credit rating with each of them. That’s why there’s some variation between a ‘bad’ and ‘poor’ credit score.

What is a bad credit score?

As mentioned above, different credit reference agencies have different credit score ratings. It’s important to note that ‘bad’ isn’t one of the specific categories used by agencies. These are excellent, good, fair, poor and very poor. Bad is more of a subjective category, which people may use to group both poor and very poor scores.

Be aware that some lenders can consider anything below a ‘fair’ credit score to be ‘bad’. Here’s how that could look using scores from the UK’s three major agencies:

• Experian: 0 – 720
• Equifax: 0 – 530
• TransUnion: 0 – 565

There are a number of reasons why you may have a bad or poor credit score. If you’ve frequently missed payments, repeatedly applied for lines of credit, or have high debt or a number of defaults, your credit score is likely to be lower. CCJs (County Court Judgements) can also negatively impact your credit report.

What is a poor credit score?

To Experian, Equifax and TransUnion, a ‘poor’ credit score is:

• Experian: 561 – 720
• Equifax: 439 – 530
• TransUnion: 551 – 565

A poor credit score is below average, but it’s not the worst (‘very poor’).

Common causes of a poor credit score include a short credit history, low limits and occasional late payments. 

It’s sensible to know what lenders look for if you’re applying for finance with poor credit, so take the time to strengthen your application.

If you’ve got poor credit, don’t panic. There are surefire ways to improve your credit score and increase your eligibility over time with good financial habits.

Bad credit vs poor credit: what’s the difference?

When it comes to credit ratings, ‘bad’ is a broad term that can cover both ‘poor’ and ‘very poor’ scores. 

Remember that taking simple steps to improve your credit score (such as demonstrating your payment consistency) can move you from a ‘bad’ or ‘poor’ credit score to ‘fair’ over time.

How do bad or poor credit scores affect applications?

The lower your credit score, the more difficult you may find it to access attractive finance deals and interest rates. That said, there are ways to improve your overall score and boost your eligibility as a borrower.

A poor credit score might still be approved with higher interest or by using a guarantor. Whilst it is possible to secure car finance with bad credit, you might need to use a specialist lender or broker. 

That’s where My Car Credit can help. Whether you’re looking for car finance with poor or bad credit, our access to the largest panel of car finance lenders out of any UK broker means we can connect you with specialist lenders who’ll consider your individual circumstances. 

What’s more, our initial credit check is only ever a soft search, meaning that it won’t impact your overall credit score.

Be aware that whilst lenders will look at your credit score to assess your eligibility and reliability as a borrower, they’ll also consider overall affordability. In other words, lenders will assess your overall income, expenditure and any existing debt to evaluate your ability to repay a loan.

How to improve your credit score over time

There are a number of ways that you can improve your credit score over time. Some of the best strategies for doing so include:

• Checking your reports – Double check your credit report for any small mistakes, including typos and wrong addresses. Advise your provider of any mistakes to improve your overall rating.
• Paying your bills on time – Making your regular bills on time and in full is one of the best ways to improve your credit score.
• Registering to vote – Even if you live with parents or in shared accommodation, registering to vote can boost your credit score.
• Minimising credit utilisation – A low credit utilisation indicates that you’re only using a small percentage of any credit available to you, making you a less risky loan candidate.
• Keeping older credit accounts open – Keeping old accounts open will increase your credit history, favouring your overall score. Just be sure that you pay off any outstanding debt on these accounts.

It’s also worth checking your credit score with all three credit reference agencies (Experian, Equifax and TransUnion) to ensure accuracy. 

With My Car Credit’s car finance calculator, you can explore suitable motor finance deals for your needs and circumstances. Plus, because our initial application is only ever a soft search, it won’t impact your overall credit score.

Can I still get car finance with a bad credit score?

It’s entirely possible to secure car finance with either a bad or poor credit score. 

By using a lender like My Car Credit, you’ll get access to specialists in poor or bad credit. Because we’ve got the largest panel of car finance lenders out of any broker, we can help you find the most suitable product and lender for your circumstances. That means you’re more likely to be approved for an agreement at a rate you can afford.

Use our online application form for a no-obligation, initial soft search check of your profile. We’ll establish your eligibility and indicate the kinds of car finance agreements you could benefit from, all without impacting your overall credit score. 

Plus, we focus on more than just your credit score. By assessing your overall affordability too, we’ll get a more comprehensive sense of your borrower profile, helping to find an appropriate finance agreement for your circumstances.

Bad credit vs poor credit FAQs

What’s worse: bad or poor credit?

Because it’s broader, bad credit can be worse than poor credit, representing a higher risk to lenders. Different UK credit reference agencies vary in their classification of ‘bad’ and ‘poor’ credit. That’s why it’s sensible to double-check your score with each agency, so you’ve got a better sense of your rating.

How do I know if I have bad or poor credit?

There are easy ways to check your credit rating. Three of the UK’s biggest credit reference agencies (Experian, Equifax and TransUnion) have online tools for you to check your credit score. 

Does bad credit mean I can’t get car finance?

A bad credit rating doesn’t mean you can’t get car finance. With a lender like My Car Credit, you can secure car finance even if your credit rating is poor or bad. With access to a range of specialist lenders, we’ll help you find the most suitable deal for your circumstances.

Can improving my credit score lower my car finance rate?

Improving your credit score is one of the best ways to increase your access to more favourable car finance agreements. It demonstrates that you’re a more reliable borrower to lenders, who may therefore offer more favourable terms. Be aware that affordability can also be considered in any car finance rate you’re offered.

How long does it take to rebuild from bad to good credit?

There’s no clear answer to this question. It can take anywhere from a few months to several years to improve your credit score. This will depend on factors including frequently moving house and regular loan defaults. That said, sensible financial behaviour can boost your credit score over time, improving your finance eligibility.