Self Help: Credit Scores

What you need to know about Credit Scores

A credit score is a numeric value placed on how credit worthy you are. That means your ability to borrow money. It uses many factors to determine this, such as how much you have already borrowed, whether you are at the top end of your credit limit (maxed out credit cards) whether you pay your bills on time and more.

In most cases, lenders (from mortgages to interest free credit sofa companies) will use your credit rating to decide whether to lend you money and how much interest to charge you.

Where can you get one?

You can check your score with three main credit reference agencies in the UK. You can use the free provided service from Noddle or Clearscore, or if you would like additional benefits that incur a charge, Experian and Equifax offer free 30 day online trials, but charge a fee thereafter or provide a one off report for £2.

Credit score for FREE:

Credit Score that charges you a fee to see:

This will also give you the opportunity to check everything is as it should be and correct any mistakes with either the originating lender or the credit reference agency.

Here are a few things you can do to improve your credit score.

  • Avoid applying for lots of credit at once – try the steps below to improve your rating before applying for more credit. When you do, stagger your applications to different months. Some companies check your credit score when providing you with quotations – you can request that this is noted as ‘quotation search’
  • Clear and cancel accounts / cards you don’t need – banks and other lenders will be wary of lending to someone who looks like they already have a lot of credit / debt.
  • Make payments ontime – missed or late payments will be recorded on your file for 6 years (from utilities to loans and mortgages to store cards)
  • Avoid maxing out your credit cards – lenders look at how much of your credit you are using, and if it is at the top end, then they may think twice about lending you more.
  • Get on the electoral register – lenders check you live where you say you live visit About My Vote and complete the form
  • Stable home address – it’s a fact of life, but sometimes lenders feel more comfortable if you are not moving house a lot.
  • Check your credit report – this is important, with increased identity fraud make sure all the credit on your file belongs to you, and if it doesn’t make sure to report it to the credit reference agency asap.
  • Avoid apply for joint accounts – this includes insurance, mortgages, bank accounts with someone who has a poor credit rating
  • Build a good history of credit – applying for a credit-builder credit card, ensuring you pay it in full every month so not end up in debt, as these cards are usually set at a very high interest rate.

If you have been issued a county court judgement (CCJ) or in a debt solution such as a sequestration or bankruptcy this will remain on your record for 6 years and will negatively impact your credit score.

If there’s information on your file that’s accurate but doesn’t reflect your current situation – for example, you got into debt problems when you lost your job but you’re back in work now – you can add a ‘notice of correction’ to your credit report. This is a statement of up to 200 words about what happened.

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