What Credit Score is Needed for a Secured Loan in the UK?
13th February 2026
By Simon Carr
What Credit Score is Needed for a Secured Loan in the UK?
Many people believe there’s a specific ‘magic number’ they must reach on their credit report to be approved for a loan. When it comes to the question of what credit score is needed for a secured loan, the answer is more nuanced. Lenders in the UK don’t rely on a single score; instead, they use it as one part of a much larger assessment of your financial health and the risk involved.
This guide explains why your credit score is just one piece of the puzzle, what lenders really look for, and how you can improve your chances of being approved for a secured loan.
Understanding Credit Scores and Lenders
Before we dive into the details of a secured loan application, it’s helpful to understand what a credit score is and why there isn’t a universal standard for lenders.
What Is a Credit Score?
A credit score is a three-digit number that summarises the information in your credit report. It’s a snapshot of your history with borrowing money. This includes everything from credit cards and personal loans to mortgages and mobile phone contracts.
The three main credit reference agencies in the UK are Experian, Equifax, and TransUnion. Each one calculates your score using a slightly different formula and scale, which is why your score can vary between them. A “good” score with Experian might be different from a “good” score with Equifax.
It is wise to review your information across all agencies to get a complete picture. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)
Why There’s No “Magic Number” for a Secured Loan
There is no single credit score that guarantees approval for a secured loan. Every lender has its own internal scoring system and appetite for risk. One lender might be happy to approve an application with a certain score, while another may decline it.
Lenders use your credit score as an initial indicator, but they always dig deeper. They are more interested in the story behind the number. For example, a low score due to having very little credit history is viewed differently from a low score caused by recent defaults or County Court Judgements (CCJs).
How Lenders Assess Your Secured Loan Application
A secured loan application is judged on a range of factors, not just the score. The lender wants to be confident that you can afford the repayments and that the security you are offering (your property) is sufficient. Here are the key elements they analyse.
- Affordability: This is perhaps the most critical factor. Lenders will carry out a detailed assessment of your income and your monthly outgoings. They need to be satisfied that you have enough disposable income to comfortably cover the new loan repayments on top of your existing commitments, like your mortgage and household bills.
- Credit History Details: Instead of just looking at the score, lenders examine your full credit file. They look for patterns of behaviour. A long history of consistent, on-time payments is a strong positive signal. Conversely, recent missed payments, defaults, or CCJs will raise concerns, though they may not automatically lead to a decline for a secured loan.
- Equity in Your Property: For a secured loan, the equity in your home is vital. Equity is the portion of your property that you own outright—its current market value minus any outstanding mortgage or other loans secured against it. The more equity you have, the more secure the loan is for the lender.
- Loan-to-Value (LTV): This is related to equity. LTV is the ratio of the loan amount compared to the value of the property. For example, if your home is worth £250,000 and you want to borrow £50,000, your LTV for that loan would be 20%. A lower LTV represents a lower risk for the lender.
- Employment Status: A stable employment history and a reliable source of income are important. Lenders view this as a sign that you are likely to maintain your ability to make repayments throughout the loan term.
Can You Get a Secured Loan with a Bad Credit Score?
One of the main reasons people consider secured loans is because they can be more accessible to those with lower credit scores. While it’s not guaranteed, it is often possible to get a secured loan with what might be considered a “bad” credit history.
The reason for this is the security itself. By securing the loan against your property, you reduce the lender’s financial risk. If you were to stop making payments, the lender has a legal claim on your property to recover the money owed. This collateral makes them more willing to consider applicants who might be rejected for an unsecured personal loan.
However, this feature comes with a significant responsibility. Because your property is the collateral, it’s crucial to understand the risks. Your property may be at risk if repayments are not made. Failing to meet your payment obligations could lead to serious consequences, including legal action from the lender, additional charges and increased interest rates, and ultimately, the repossession of your home.
If you are approved for a secured loan with a poor credit history, you may find that the interest rate offered is higher than it would be for someone with an excellent credit profile. This is how lenders balance the increased risk.
How to Improve Your Chances of Approval
While there’s no set credit score needed for a secured loan, taking steps to improve your overall financial profile can increase your chances of being approved and securing a better interest rate.
1. Check Your Credit Report for Errors
Mistakes on your credit file are not uncommon and can unfairly lower your score. Check your reports with all three agencies and dispute any inaccuracies you find, such as incorrect addresses or accounts you don’t recognise.
2. Build a Positive Payment History
The most effective way to improve your credit profile is to manage your existing credit responsibly. Always pay your bills, credit cards, and loan repayments on time. Even a few months of consistent payments can start to make a positive difference.
3. Register on the Electoral Roll
Being registered to vote at your current address helps lenders verify your identity and is a quick and easy way to boost your credit score slightly.
4. Manage Your Existing Debt
Lenders look at your debt-to-income ratio. If you can, try to pay down existing debts like credit card balances or personal loans. This shows you can manage your finances and improves your affordability for a new loan.
5. Avoid Multiple Applications
Each time you formally apply for credit, a “hard search” is recorded on your file. Too many hard searches in a short period can make lenders think you are financially overstretched. It’s better to use eligibility checkers where possible or speak to a broker who can assess your options without leaving multiple marks on your file.
Ultimately, when asking what credit score is needed for a secured loan, the focus should be less on the number and more on the overall health of your finances. A strong application demonstrates affordability, stability, and sufficient equity in your property. For a deeper understanding, you can read more about the risks and benefits of secured loans on the MoneyHelper website.