Tuesday, 3 August 2021
Your credit score is more important than you think.
What is my credit score?
A credit score is unique to each individual and is based entirely and exclusively on the information found within an individual’s credit report. It is usually marked from 100-999 and the higher your credit score the more likely it is that a financial institute, such as a bank, credit card company or HP provider will lend you money. In some instances, the higher your credit score the more favourable interest rate you will be offered.
Life is better with a good credit score.
Why is my credit score important?
Most financial decisions that you take in your adulthood are influenced by your credit score e.g. financing a car, buying a house and sometimes even entering into a rental agreement. When you have a “good” or “excellent” credit score, lenders tend to see you as trustworthy as you have a proven track record of repaying your debt. They then tend to provide you with more favourable interest rates which gives you greater flexibility for shopping around with lenders.
A poor credit score restricts your borrowing capacity and in the event that you are able to secure borrowing it is usually at a higher interest rate.
How is my credit score calculated?
There are a number of factors taken into account when credit reference agencies are calculating your score, some of these are:
Building a good credit score does not happen overnight, a proven track record of repayments will help gradually build your score.
We would recommend that you register to a credit reference agency to obtain your credit report and view your credit score, especially if you are planning on applying for borrowings anytime in the future. Some credit reference agencies provide this service free of charge and others request a monthly premium.
If you would like to discuss your credit report with us, please get in touch.