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Credit Score

A credit score, often known as a credit rating, is a numerical representation of your chance of repaying debt.

Credit score and why it is important

Lenders such as banks and credit card companies will calculate your credit score based on your credit history, which will indicate the level of risk they face in lending to you.

The higher your credit score, the more likely you are to get approved for credit at the best possible rates. Conversely, a low credit score may result in your application for a loan being rejected or the terms offered to be less favourable.

Why my credit score is important?

Credit scores might affect the financial services and products you take out throughout your life. When applying for a credit card or a mortgage, for example, your credit score may be evaluated to determine whether your application is accepted and how much you will pay.

A better credit score is frequently considered a smaller risk, which means lenders are more willing to extend loans to them. Because of the lower risk, these people can also obtain credit on better terms and pay lower interest rates.

It’s important to understand that each lender has its own credit score policy. So, even if you don’t meet one lender’s requirements, you might be able to acquire credit from another.

However, before submitting another application, it’s critical to figure out why you were rejected the first time. You should also be aware that lenders may see too many credit searches in a short period of time as a red flag.

What influences your credit score?

Your credit report determines your credit score. Your credit score can be affected by a number of items on your credit report, including:

  • What percentage of your available credit are you using, as well as your total debts
  • Your credit history
  • The number of hard credit searches that appear on your credit report when you actively apply for credit. These make a mark on your credit file, which lenders may consider when considering whether to extend your credit. Sometimes soft credit searches, which aren’t visible to lenders, may appear on your credit report. Soft searches may be conducted on you to do a background check or authenticate your identification, but they will not be visible to lenders.
  • The presence on the Electoral roll

Easy steps to improve your credit score

  • Ensure you don’t miss any payments
  • Review your credit report and score on a frequent basis to ensure the information is accurate.
  • Closing any unused credit accounts is a good idea because having a large total credit limit can be seen as a red flag by lenders
  • Fill out an election registration form.

Where I can monitor my credit score?

There are a few different services that you can use, but we recommend a comprehensive credit report from Checkmyfile.com. Here are some benefits:

  • You can check your Credit History as reported to Equifax, Experian & TransUnion
  • Look for differences in what’s been reported
  • Identify problem accounts, and take steps to minimize their impact
  • See the types of credit reports from your electric bill to your mortgage
  • View up to 6 years of history of your repayment performance

At Checkmyfile, you can check your credit score for free during the first 30 days. If you want to monitor your credit score, later on, there is a monthly payment of £14.99 after the initial 30 days.

Please do not hesitate to contact us if you have any questions regarding Credit Score or our services. Our mortgage specialists will be happy to help and explain every detail.