What is it?
A credit score is a number that represents the likelihood to others of you paying credit back, essentially it’s a round up of your history with finance.
Lenders will look at your credit history when they calculate your credit score.
Companies such as banks are less likely to lend individuals money who don’t have a credit score because they will be unaware of what your spending habits are like and may deem you too risky aka. they don’t know if you are going to pay them back.
The higher the number on your credit score, the better chance you have of being accepted for credit.
What does it affect?
Your credit score influences your chances of getting:
- Credit card, loans and mortgages
- Car financing
- Gas & electricity monthly payments
- Mobile phone contracts
- Insurance monthly payments
- Employability – Occasionally companies check prospective employees credit score for reliability.
- Property rentals
How do I get one?
You don’t apply for one, you automatically have one as part of your background. It is calculated from your borrowing history and how you typically repay money you’ve previously borrowed. This happens when you apply for credit such as a loan, credit card, mortgage, car finance… even a mobile phone contract.
Each lender uses a slightly different lending criteria, so make sure you look around for a deal that you’re more likely to be accepted for as well as being best suited to you and your credit history.
How do I check my score?
There are companies that provide yearly free checks and produce a ‘credit report’ for you.
As a starting point, three FREE credit reference agencies are: