Give yourself some credit
A credit score is one of the key pieces of information that lenders look at when deciding whether to give you a loan. If you have a bad credit score, it could mean that you pay a higher interest rate when you borrow money; you might not be able to borrow as much money as people with higher credit scores and if it could even lead to some providers declining to lend to you at all.
Given that a credit score is so important, you’d expect that most of us would pay close attention to them. According to April 2016 research from RateSetter though, that’s not the case: 50% of people in the UK have never checked their credit score, and a further 25% have checked sometime in the past but do not know their current score.
Worryingly, the research also found that more than half of people (53%) are actually doing something which could be harming their score, such as sharing a bank account with someone with poor credit history or not being on the electoral register.
Credit scores can seem daunting and unfortunately, the way that they are calculated is not always clear, particularly since it varies from provider to provider.
Happily though, it’s relatively straightforward to get the basics right, and there are several free, easy steps that you can take which could improve your score substantially.
We have a detailed guide for those who want to improve their credit scores, which is essential reading for anyone who might want to borrow money in future – whether that’s £5,000 for a new car or £200,000 to buy a house. Our guide is free and was put together with the help of our own credit scoring team, who have added some important insider tips.
Part 1: What are credit scores, and how do they work?
Part 2: How can I improve my credit score?
Credit scores are too important to leave to chance – we hope that this information is helpful. If you’ve successfully improved your credit score in the past, let us know how in the comments section below!