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What factors affect your credit score?

What factors affect your credit score?

What is a credit score? 

By now we’re sure you’ve seen the multitude of adverts on television offering to check your credit score. But what exactly is one, and why should you care? A credit score is what lenders use to work out whether or not you qualify for a particular credit card, loan or similar service. This score is calculated using your credit report and other information you provided as part of your application.

What affects my credit score?

Confusingly, a decent wage and borrowing history doesn’t automatically mean a good credit score though as there’s hundreds of factors which come into account. Here’s just a few of them to give you a better idea:

Utility bills – It may come as a surprise that those who supply your energy are highly likely to share you data with credit agencies. So it’s important that all your bills are paid on time and in the correct amount. Some providers understand that one missed payment might not be a true representation of you, but it could still go against you further down the line.

Registering to vote – It might initially be difficult to connect the dots on this one, but by not registering, you could be hit with a massive 50 point deduction to your score. This is because lenders may use your electoral roll information to verify your name and address as a safeguard against fraud.

Your partner’s finances – If you’re applying for a financial product with your better half, then their credit score will be taken into account too. This can work for or against you depending on your circumstances, but it’s often worth checking beforehand whether you should apply together or separately.

Will applying for a loan not impact my credit score? 

Direct lenders will always look to conduct a credit check upon your application. However, there are ways you can check eligibility first before you go directly to a lender. Most brokers and comparison sites can offer a no credit check loans service, also know as a soft search.

If you’re trying to maintain your score or improve it but need a loan, this could be an option for you.

What if I have a bad credit score?

A bad credit score doesn’t always mean you can’t get a loan, but it definitely can be a tougher task. Bad credit loans for example offer an outlet for those who need a loan quickly but don’t meet the criteria of a good credit score. If you are looking for a bad credit loan, then you can apply using our quick three step process.

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