HSBC Reveals 1 in 4 Britons Don’t Understand How Credit Scores Are Calculated

New research from HSBC UK reveals a national blind spot around credit scores – and millennials are the most anxious group.

The survey of 2,000 people uncovers a significant split in both concern and action, with 60% of millennials (29-44) concerned about their credit score. In contrast, older generations are far less worried, with 63% of those aged 55 and over admitting they have taken no action to manage their score in the last year.

This generational gap is part of a wider picture of financial uncertainty, as the research also reveals a significant blind spot in the nation’s awareness, with more than a third of adults (36%) admitting they do not know their own credit score.

This lack of engagement appears to be holding people back, with over two-fifths (43%) having taken no steps in the past year to improve or maintain their credit score. This is despite “missing a credit card payment” being the most widely recognised factor that can affect a score (56%), while the most common proactive measure is “making payments on time,” cited by just one-third (33%) of respondents.

“This research highlights a crucial disconnect between financial concern and practical understanding, especially among younger generations,” says Carl Watchorn, Head of Customer Propositions at HSBC UK.

“This isn’t just about a number on a screen; it’s about the real-world impact on your wallet. A good credit score is the key that unlocks better rates on loans, credit cards, and mortgages, which can save you thousands over a lifetime. The widespread confusion and inaction means many are missing out on these significant savings without even realising it.”

When it comes to improving a credit score, HSBC UK offers five key pieces of advice:

• Get on the electoral roll: Lenders use it to verify your name and address. Not being registered could delay or block your application
• Build credit history: If you haven’t borrowed before, small amounts of credit, like a low-limit credit card or arranged overdraft, can help build a stronger record
• Pay on time and stay within limits: Missed payments hurt your score; while staying within your limits shows lenders you manage money responsibly
• Avoid multiple applications: Too many applications can suggest financial strain. Use a ‘quotation search’ to compare rates without affecting your credit profile
• Check for errors:  Review your credit report and report any mistakes to keep it accurate

“Building a healthy credit score doesn’t have to be complicated,” adds Carl. “Simple, consistent habits can make a huge difference. At HSBC UK, we are committed to demystifying finance and providing our customers with the tools and knowledge they need to feel confident about their financial future.”

HSBC UK offers a range of tools to help customers manage their finances, including clear information on credit cards and mortgages for those looking to understand more, the bank provides a comprehensive guide on what a credit score is and how to improve it.

Click here to find out more about the importance of credit scores and tips on how to boost your score