Everyone has a credit rating…
Everyone in the UK has a credit score. We’re not talking just about the credit score a credit reference agency gives you when you login.
Your credit rating is going to determine if you are accepted for credit or not.
It could help determine if you are offered a job or not.
It could also be the difference in you being able to pay for your Car or Home insurance monthly rather than all in one go.
Your Credit rating is not just a random number, it’s made up with thousands of pieces of information.
Your Credit rating is made up from your Age, Your Income, the way you manage your finances, your Employment status and more.
However, your Credit rating is not affected by your Race, Religion or Colour.
Your Credit rating can go up and down
Credit ratings will go up and down depending on a range of different circumstances.
You may for example apply for a credit product and this could see your credit rating fall slightly (but only for a short time).
Each new credit account you open will cause your Credit rating score to fall slightly before it recovers.
You can help improve your credit rating by only opening and applying for products you need.
Keep your debts as low as you possibly can and try to make more than the minimum repayments each month.
How to improve your credit rating
If you have missed repayments or made too many applications for credit for example, your credit rating may damaged slightly.
You can start to rebuild your credit rating whenever you choose.
The credit scores credit reference agencies give you…
A Credit Score presented by the Credit Reference agencies represents the way they see your current Credit rating.
It’s by no means an indication if you will be accepted for credit or not.
Remember, Credit reference agencies don’t lend money, so the score is by no means a real true reflection of your credit rating.
Your credit score with the credit reference agencies can differ. There are 3 credit reference agencies in the UK.
Call Credit, Equifax and Experian.
Sometimes lenders may only report account data to one or two of the credit reference agencies rather than all three.
The total credit score credit reference agencies give also differs.
Equifax and Call Credit will score you out of 750 whilst Experian score you out of 999.
Each credit reference agency will also put you into a band, usually these bands will show your credit score as either very poor, poor, fair, good or excellent.
Of course, we all want to be seen as Credit Worthy, we all want to reach that Excellent mile stone.
So first, let’s discover what your actual Credit Rating is going to be used for.
What use does the Credit Reference agency credit score have?
When you apply for a Job, want to take out Insurance or even just want to move house, your Credit Rating Score could be used. You could end up paying more for products and services with a low credit score. You could even be stopped in your tracks in terms of getting Jobs or being able to move.
So taking the positive steps today could help you in the future