The terms credit rating and credit score are wrongly assumed to be the same thing. In fact, even though they both serve as a measure of creditworthiness, they are used for different purposes.
A credit rating is a measure of how creditworthy a business or even a Government is. It is normally a grade combing two or three letters. The highest credit rating a business of Government can be awarded is the triple-A or “AAA”. This denotes an organisation with the strongest financial position. This then decreases to “AA” then “A”, “BBB” then “BB” and so, on down to the lowest rating which is D for default.
Credit scores are used for individuals and are often a number value. However, what constitutes a ‘good’ or ‘bad’ credit score is measured differently by the three major UK credit bureaus: Equifax, Experian and TransUnion. These are outlined in the section above ‘What is a good credit score?’
For more information on how to improve your credit score, see our guide ‘Eight ways to improve your credit score’.