Why It’s Important to Know Your Credit Score

As the famous advert will tell you, years ago the decision on whether or not you would receive credit was in the hands of a bank manager or a high street lender – a simpler time. Now, everything the lender needs to know in order to make their decision is available to them thanks to the Credit Score system.

You might think that you aren’t a number but, sadly, to lenders and financial bodies you most certainly are. Your credit score will be a number between 0 and 1000 that shows whether or not you can be trusted to repay money you borrow – amongst other things!

For example, if you have borrowed money in the past and failed to make repayments on time, or at all, then your credit score will be negatively affected. The number attributed to you will decrease every time you miss a payment for something you owe or any time you are late – you’d be surprised how much this score actually affects:

A poor credit score could leave you unable to borrow money at all and this includes: loans, mortgages, credit cards and store cards – essentially a poor credit score indicates you can’t be trusted. Low scores also impact on whether or not you are eligible for finance agreements such as hire purchase, property rental, car insurance and certain job roles. A poor score doesn’t label you as a con artist or a thief but employers like to see a good score if you are to handle money.

Your score can be improved in a number of ways such as honouring your existing debts on time or paying them off early, borrowing with a guarantor and repaying yourself without the need for the safety net or using a creditbuilder credit card responsibly.

All this information is very useful but, if you don’t know your credit score, how can you go about improving it? Thankfully, there are a number of reputable credit report comparison sites that you can visit, and many of them offer a lot of valuable advice. There might be nothing to worry about but it is always best to know as far as your credit score is concerned.

Living in ignorance of your credit score could leave you in an awkward position later in life. Applying for your first mortgage? Declined. Applying for a credit card? Declined. Cheaper car insurance? Declined. What’s even worse is if you continually apply for credit with a poor score, it’ll make your score even worse thanks to your ignorance!

Don’t hesitate, make sure you check your credit score before you make any more plans to borrow a few pounds!