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Your credit score is a numerical rating of your creditworthiness that is calculated based on your financial activity and credit history. Credit scores are produced by specialist credit reference agencies, and each agency uses its own scoring method to determine your credit score.
In order to get your credit score, you’ll generally need to apply for a paid credit report through one of the credit rating agencies. Many agencies also offer limited free trials that let you access your credit score for up to 30 days.
Whenever you apply for credit, a potential lender will look at your history of borrowing and repaying to determine how much of a risk you are – in other words, how likely they are to get their money back. The better your credit history, the easier you will find it to obtain credit and the better the rates available to you. Having a good credit score can help you secure a mortgage, car loan and other lines of credit.
Whenever you make an application for credit (e.g. a mortgage, credit card or personal loan), the lender will turn to these agencies to look at your score and history, which will play a major role in the success or failure of your application.
By looking at your credit report in conjunction with its own assessment of your circumstances, the lender will decide the following:
Your credit report or history is a detailed record of your borrowing history, with information such as the loans you have held and applied for. It also includes personal information such as your name and address.
Your credit score is a number that is calculated using the information on your credit report. Your score determines your credit rating which could be “very poor”, “poor”, “fair”, “good” or “excellent”.
When deciding whether to take you on as a customer, lenders will usually look at your more recent financial history to determine their decision. However, your financial decisions, both good and bad, will remain on record for up to six years.
Depending on your score, you’re said to have excellent, good, fair, poor or very poor credit:
|TransUnion (formerly Callcredit)||0-550|
|1: Very poor|
Having a decent credit score will make it easier to get approved for credit cards and is also likely to affect the credit limit and interest rate that you’re offered by lenders.
You can check your credit score directly with the credit reference agencies that produce your credit score. Despite what you may have read, there is no such thing as a universal credit score, and different agencies use their own rating system to determine your credit score.
This means that your credit score will be different between different agencies, and what is considered a good score with one agency may not necessarily be a good score with another agency.
You can check your credit score with a range of credit report providers here.
There are many details listed on your credit history, which help lenders determine how high or low risk you are. However, you’ll be happy to know not every detail of your life is there for show.
Find out what lenders can and can’t see when studying your credit file.
It will take time to improve your credit history and won’t change overnight. Start by looking at your credit report to see if there are any errors. If there are, you can contact the credit reference agency to set the record straight.
Make regular, on-time payments to your existing debt (e.g. loans and credit cards) and try not to make numerous applications for credit (successful or not) within a short space of time.
If you’re not on the electoral roll, visit your local authority’s website to get added.
If you have no credit history at all, or want to rebuild a poor one, consider getting a credit builder card.
As the name suggests, Student Credit Checker is a credit report provider for students looking to get on top of their credit score.
UK Credit Ratings offers a credit report subscription service designed to help you improve your credit rating.
MoneySuperMarket’s Credit Monitor service offers free credit reports and credit scores, along with personalised tips.
Smarten up your credit profile with the Capital One CreditWise free credit report.
Could you be doing a good deed for your credit file with Credit Karma’s free credit report and credit score service? Here’s our review.
TotallyMoney offers totally free access to your TransUnion credit report and credit score, but what’s the catch?
It can’t promise to work miracles, but Credit Angel’s credit report service can help you improve your credit score.
ClearScore gives you free access to your Equifax credit score and credit report, forever.
The best methods for getting your credit rating in top shape, and boosting your credit score.
Here’s how to get a free credit report and credit check in the UK.
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