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How is Credit Score Determined in the UK? + Tips to Improve It

If you’re planning to move abroad or simply want to tidy up your finances here at home, knowing how your credit score is determined – and more importantly, how to improve it – is definitely a smart move! 

Your credit score is just a number, but it’s a reflection of your financial behaviour, which makes it a pretty key part of your financial health. It affects everything from mobile phone contracts to mortgages, and if you’re relocating, your history here may influence how lenders view you overseas.

What Is Your Credit File, and How Does it Shape Your Credit Score?

Your credit file is basically a full record of:

  • Your past borrowing
  • Your use of credit
  • How you’ve handled bills and loans

The main credit reference agencies in the UK – Experian, Equifax, and TransUnion – collect data to build up this file. People often talk about their “credit score”, but the fact is, you actually have separate scores with each of the agencies because each one has its own system. 

So, when you submit a credit application – for a credit card, for example -the lender may check your credit file via one or more of the agencies. The lender then uses their own criteria (plus the data in your file) to decide if you’re a good bet. So your credit score reflects how trustworthy you appear to a lender.

Which Factors Influence How Your Credit Score is Calculated?

There are a few things at play when your credit score is being calculated, so let’s explore some of these here:

Payment History (Pay Bills on Time)

This is absolutely critical. Missed payments or CCJs send big red flags to lenders.

Credit Accounts and Credit Utilisation

This includes:

  • The number of credit accounts you hold (cards, loans, etc.)
  • How long you’ve had them
  • Especially how much of your available credit you’re using

For example, if you’ve got a credit card with a limit of £2,000 and you’re regularly using £1,800, that’s high use and it can hurt your score.

Credit History Length and Mix

The longer and more stable your borrowing history, the better, since it shows you’ve managed credit over time. Opening loads of new accounts can make you look riskier.

Public Records and Address Stability

If you’ve moved around a lot or have public records like bankruptcy or CCJs, your score will likely take a hit.

Errors in Your Credit Report

Mistakes happen! One survey found that 29% of UK adults who checked their credit report had errors on it. 

Having all of these on your side helps you secure a good credit score; neglecting these things can land you with a low credit score, which can restrict your options.

What Are the Average Credit Scores and Why Do They Vary?

Since each agency uses a different scale, you’ll find different “average” numbers depending on who you ask.

Age and location make a difference too: younger adults often have lower scores, simply because their credit history is shorter. Data shows, for example, that people aged 18‑25 may average around 447 in certain scoring models, but that rises to 839 for those aged 65+. 

And there’s actually a bit of variation regionally, too: some parts of the UK have average scores in the 700s, others in the 800s.

What this tells you is two things: first, don’t panic if your agency’s number looks different from someone else’s; and second, focus less on the absolute number, more on the trend and the behaviour behind it.

Why Checking Your Credit Score Regularly Matters

You should check your credit score and credit file regularly (at least yearly, ideally more frequently) because:

  • If you spot errors on your credit report, you can request corrections, and those corrections can improve your score. Over nine million UK adults could have mistakes on their credit files.
  • Checking helps you spot identity fraud or unauthorised credit accounts.
  • Keeping an eye on things helps you understand what lenders see when they view your file, so you’re better prepared when you submit a credit application.

And to clear up a common worry we see a lot of people ask: checking your own credit score via a soft check doesn’t hurt your score. It’s the hard checks (by lenders) that can leave marks.

How to Improve Your Credit Score

If you’re either planning a move abroad or at least considering it, improving your credit score now will give you a head‑start!

  1. Register on the Electoral Roll: It’s simple to do and helps confirm your address in the eyes of lenders.
  1. Pay all Bills on Time: Set direct debits or reminders so you don’t miss payments – your payment history is the single most important factor.
  1. Keep Your Credit Utilisation Low: Ideally, use less than 30% of your available credit. If you have a £1,000 limit, try to keep around £300 or less outstanding.
  1. Don’t Apply for Lots of New Credit at Once: Each credit application is logged. Lenders may see multiple applications as a sign of financial stress, which can lower your score.
  1. Check All Your Credit Reports with the Three Agencies: Since they each hold slightly different information, you’ll get the full picture only if you cover all three.
  1. Consider Requesting a Higher Limit (Only If You Won’t Increase Spending): If your card issuer offers a higher limit and you don’t use more of it, your utilisation rate drops, which helps.
  1. Keep Old Credit Accounts Open (If They Don’t Cost you Fees): Having long‑standing accounts shows a stable credit history.

You’ll likely see gradual improvement when you follow these steps consistently. Depending on how low your score was, it might take several months or even longer, but the effort definitely pays off: better credit scores often mean better interest rates and access to higher credit limits. 

And if you’re moving abroad, having your UK financial history in good shape makes the transition easier!

Final Thoughts

Relocating or renting overseas? Simply want the peace of mind that your financial health is solid? Then building and maintaining a strong credit score here in the UK matters. You don’t have to be perfect here, just consistent.

How Upscore Can Help

If you want to make life even smoother when you move abroad, consider signing up for Upscore’s Finance Passport! It helps you carry your financial credentials in one place and present your stronger credit history when you need it abroad or at home.

Sign Up for Upscore’s Finance Passport Today!

What is the First-Time Home Buyer Government Grant in the UK? | Upscore

It’s no easy feat getting a foot on the property ladder in the UK, especially as you try to get approved for a mortgage with a down payment. But there’s good news for first-time buyers!

The UK government has partially made the lives of first-time home buyers easier. They’ve introduced first-time home buyer schemes that apply to some UK homes, and the main one to consider is the First Homes scheme. What makes this scheme an incentive is that it offers discounts on specific properties to UK residents.

There are still many challenges, even with the scheme. With housing affordability also through the roof, you might be looking for solutions or even considering moving abroad – an alternative way to achieve your dream. Here, we’ll break down what the First Homes scheme is and explain how you can become a homeowner more easily.

What is the First Homes Scheme?

Offering first-time buyers specific new homes at a discounted price, the First Homes scheme means that eligible first-time home buyers do not need to pay the property’s full market value. It’s designed to help you purchase new-build homes, though it also applies to some resale homes that were originally sold under the scheme.

Years of saving for a 20% deposit on a mortgage are a reality for many first-time home buyers – the median deposit for first-time buyers has tripled from £13,600 to £37,400 on average since 2006, according to the FCA, and, at the same time, the prices of properties are on the rise. 

For instance, the average house prices in the UK have exceeded £256,000 since March 2021, according to Statista. But that’s where the First Home scheme can be partially useful if you qualify.

The scheme opens some doors for you, offering a 30% to 50% discount on eligible properties. So, as an example, a new-build home’s market value might be £250,000, but under the scheme and with its 30% discount, you could purchase it for £175,000.

How Does the First Homes Scheme Work?

The scheme’s discounted prices are key, but how does it work? The process generally starts by looking for a new home in your location, which you can do by checking out those that developers or estate agents advertise through the First Homes scheme. 

There’s a catch in terms of the eligible property value – after the discount is applied, the price of new build home generally can’t be more than £250,000 (or greater than £420,000 if the home is located in London) according to the regulations.

Typically, an independent surveyor will establish the discounted purchase price to maintain fairness and account for the actual market value. 

The scheme supports full ownership, so it’s unlike shared ownership because you own 100% of the property and don’t need to pay rent. In other words, what you own is the entire discounted price.

What are the Eligibility Requirements for the First Homes Scheme?

Aside from the eligible property value restrictions mentioned, specific local eligibility criteria and home eligibility criteria may determine who can receive the First Homes discount or who is a priority. Here are a few of the eligibility requirements for this scheme:

  • You have to be a first-time buyer, which applies even if you’re buying a property with others. So in this case, according to the UK government website, whoever applies with you must also be a first-time buyer.
  • You must be 18 years old or over.
  • Keep in mind that your joint household income when applying with others can’t exceed £80,000 annually before tax, or £90,000 before tax if the home is in London.
  • Key workers, individuals who live in the area, and those on lower incomes may count as priority buyers, and the local authority may aim to offer the First Homes discount to them first.

Caps on Income and Mortgage Eligibility Expectations

These caps on income apply to applicants applying on their own as well. So you are not eligible for this first-time buyer scheme if you earn more than £80,000 a year before tax (or £90,000 a year if the property you’re interested in is in London). 

A different matter altogether, though, is that there are specific mortgage eligibility expectations with the First Homes discount. You need to be eligible or able to obtain a secure mortgage for at least 50% of the price of the home to qualify for the discount.

How Can I Apply for the First Homes Scheme?

If you’re moving toward buying your first home, and the First Home scheme aligns with your situation, you can apply for it by completing the steps below:

  1. Apply for help by reaching out to the estate agent or property developer and letting them know you want to buy a home through the scheme.
  2. Once they’ve checked you qualify, provide them with the details of a conveyancer.
  3. The estate agent or property developer will forward your application to the local council.
  4. If you’re interested in a new build, you need to pay the required reservation fee.
  5. With the approval of the council established, contact your conveyancer and proceed to set up your mortgage.

Can You Use the First Homes Scheme to Buy a House Abroad?

Unfortunately, it’s not possible to use the First Homes scheme to buy a house abroad. The scheme is only based in England. 

Yet, here’s the good news. There are other ways to purchase your first home abroad, one of which is to rely on UK services such as international banking for expat mortgages. One provider of such services is HSBC, but a UK expat bank account will be required.

The other way is to seek support from a foreign lender, and Upscore’s Finance Passport can help. It matches you with mortgage lenders abroad that align with your needs, whether you’re currently abroad or in the country you intend to live in. 

The Upscore Finance Passport helps you check your eligibility, compare mortgage offers, and get the support of an agent until the completion date. This makes owning your dream home much more achievable.

How Upscore Can Help

If your goal is to purchase a property in the UK, the First Homes scheme might help, but you’ll still need to face many eligibility criteria and high housing costs. For this reason, moving abroad might be a better option, and signing up for Upscore’s Finance Passport is your key to becoming a homeowner in Spain, France, Portugal, Italy, the US, or other locations. 

Navigating the world of mortgages is a smooth, convenient, fast, and personalised process with the Finance Passport. It ensures you can apply for your mortgage with overseas lenders remotely and get a dedicated agent for the mortgage application process.

Complete mortgage lender comparison easily. Sign up for the Upscore Finance Passport today!

How to Calculate UK Capital Gains Tax on Overseas Property

If you’re living in the UK and thinking about selling property overseas, the first question is almost always the same: Do I have to pay capital gains tax in the UK on it? The short answer is yes, usually. 

HMRC looks at:

  • Your residence status
  • The type of property
  • The gain you’ve made

From there, they work out what portion belongs to the UK. The long answer takes more explaining, because overseas property sales can trigger tax both where the property sits and back home in Britain, which is why people quickly want to know about double taxation agreements and reliefs. 

Do You Pay Capital Gains Tax on Overseas Property?

If you’re a UK resident and you sell an overseas asset, HMRC will want to know. That includes everything from second homes in Spain to rental flats in Dubai. The basic principle is straightforward: you’re taxed on your worldwide gains if you live in the UK. Non-residents have different rules, but if you’re reading this with a UK address, then the gains count.

That doesn’t mean you’ll be taxed twice without relief. Double taxation agreements step in to avoid that. 

Say you sell in Portugal, where there’s local tax on the gain. If there’s a treaty, the UK recognises that tax and allows credit, so you don’t end up paying both countries in full. HMRC publishes the agreements, and you can check them online before you sell.

What Counts as a Taxable Gain?

To work out a taxable gain, you start with the sale price, deduct the costs (purchase price, improvements, selling fees), and then see what’s left. The gap between those two figures is your gain. 

So it’s simple in concept but fiddly when you’re actually doing it because foreign exchange rates matter: HMRC wants figures converted into sterling at the correct rate, not whatever your bank showed on transfer day. 

If you’ve owned the property for years, you’ll also want to dig up completion statements and any legal fees to keep your taxable gain as low as possible.

How Do Income Tax Bands Affect Your CGT Rate?

The rate you pay depends on your income tax band. For basic-rate taxpayers, capital gains tax on overseas property is normally 18% for residential property and 10% for most other assets. 

If your gain pushes you into higher income brackets, the rate rises to 28% for residential property or 20% for others. That’s why planning the timing of a sale can matter!

If you already had a high-earning year, the property gain may bump your rate up, while selling in a lower income year keeps the percentage down.

What Reliefs are Available on Overseas Property?

One important relief is private residence relief. If the overseas home was genuinely your main residence for part of the time, that period may be exempt from capital gains tax liabilities. The rules are nuanced, especially since 2020 when lettings relief was cut back, but it’s still worth checking.

If you owned both a UK property and an overseas property, you could elect which was your main residence within two years of buying the second. If you never made that election, HMRC will just decide for you based on evidence.

There are also allowances that reduce what you pay. Everyone gets an annual exempt amount (in recent years this has been falling – for 2025 it’s £3,000, and due to drop further). You deduct this allowance from your taxable gain before applying tax rates. It’s obviously not a fortune, but every bit helps.

How Do You Report Overseas Property Gains?

Reporting is through your self-assessment tax return. You have to:

  1. Complete the capital gains summary form
  2. List the details
  3. Submit online by 31 January after the tax year of the sale

Selling overseas assets can trigger the requirement if you don’t usually file a self-assessment. Don’t ignore it, because penalties for late reporting or payment add up fast. HMRC expects clear records: 

  • Completion dates
  • Exchange rates
  • Cost bases
  • Evidence of any tax you paid abroad

Keep those documents organised, because they may be requested.

If your property is classed as a UK residential property (say you were still a UK resident but owned here), you have to report within 60 days of completion. That’s a tighter deadline, so know the difference. For overseas property sales, you still use the self-assessment route.

Example: Selling a Villa in Spain

Imagine you bought a Spanish villa for £150,000 equivalent in 2005, spent £20,000 on renovations, and sold it in 2023 for £300,000 equivalent. Your gain is £130,000. Deduct the annual exemption (say £6,000), which leaves £124,000 taxable gain. 

If you’re in higher tax brackets, HMRC may charge 28% because it’s a property, which gives you a tax bill of around £34,720. If you paid Spanish tax on that gain, the UK will credit it under the double taxation agreement, so you don’t pay the full amount twice.

Can You Avoid Capital Gains Tax Legally?

There are ways to manage your exposure without breaking the law. For example, selling in a tax year where your income is lower or planning an ownership structure with a spouse can all help. 

Some people use timing carefully: disposing of assets across different tax years spreads the gain and reduces the impact. Others ensure genuine residence in the property for periods to qualify for private residence relief. Avoiding capital gains tax doesn’t mean evading it; it means arranging your affairs so you don’t overpay.

What About UK Residents Moving Abroad?

If you’re moving overseas, the timing of your sale matters. Non-residents may avoid UK capital gains tax on some overseas assets after certain periods of non-residency, but HMRC has strict rules. 

Becoming a non-resident for less than five years can result in your gains still being taxed when you return. This “temporary non-residence” rule catches people who thought a quick stint abroad would exempt them. Check residency status carefully before you sell.

Step-by-Step: How to Calculate UK Capital Gains Tax on Overseas Property

  1. Work out the sale proceeds in sterling, using official exchange rates.
  2. Deduct purchase cost, improvement costs, and selling costs.
  1. Subtract your annual exempt allowance.
  1. Add the gain to your income to see which income tax band you fall into.
  1. Apply the correct capital gains tax rate (10%/20% or 18%/28%).
  1. Factor in reliefs such as private residence relief if applicable.
  1. If tax was paid abroad, apply the double taxation agreements for credit.
  1. Complete the capital gains summary form as part of your self-assessment tax return.
  1. Pay tax owed by the January deadline.

How Upscore Can Help

Planning an overseas move and want peace of mind about your finances? Upscore’s Finance Passport is a solid way to organise your documents and compare mortgages from multiple lenders – completely for free!

Sign Up For Your Upscore Finance Passport Today!

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