What is a credit score?

Many people wonder what a good credit score is and what it can mean for you. As we’re here to help the Police Family financially, we wanted to help clear a few things up.

A credit score is a personal rating, determined by information given to a credit reference agency (the credit reference agencies used in the UK are EquifaxExperian and TransUnion). They collect and hold information such as your debts, how many credit applications you have made and whether you have been making repayments. The data collected from credit reference agencies provides potential lenders with an idea of how you manage your money, this helps them to predict future behaviour, to see if you are someone they would be happy lend to.

Some tips for boosting your credit score:

✓     Ensuring that you are registered on the electoral roll

✓     Try not to change your main bank account too often. An established bank account could be better for your credit file

✓     Avoid applying for multiple lines of credit within a short space of time

✓     Ensure you pay all your bills and repayments on time

✓     Don’t exceed pre-arranged credit limits. Breaking credit limits opens you up to additional fee’s

A: No. Unless you have joint accounts with them, they won’t impact your credit file.

A: A default will stay on your credit file for six years from the date of default, regardless of whether you pay off the debt. After six years the defaults are classed as historic. After the six years, the lender won’t be able to re-register your default even if you still owe them money. You should continue to make any remaining payments regardless of the length the debt has been ongoing as the lender may go on to register a County Court Judgement against you.

A: No. Companies can’t see when you do this. You can check your credit file and score by using apps such as ClearScore, Credit Karma or Experian. When viewing your own credit file you are completing a soft search, this will not impact your credit score because you are not applying for credit. However, a hard search is more likely to have an impact on your credit file as you are applying to borrow money from a company. Hard inquiries often stay on your credit file for two years before they naturally fall off.

You may see on credit score apps that you are being given quotes for potential products. These quotes are only given from a soft search, and if the company uses representative APR, the rate you see may change after they have conducted a full credit search. A lot of companies have policies meaning they must conduct a hard search when making a decision, therefore it’s advised not apply for a lot of credit in a short space of time as it may give them the impression you have financial instability. 

A: Yes, forgetting to pay a parking ticket could result in your credit file being affected.

A: Yes. Being at the top end of your credit limit each month can give the impression to potential lenders that you aren’t in control of your finances.

A: Yes. Any previous CCJs, IVA, bankruptcies or court orders will show on your credit file. This includes any defaults or arrangements, including missed or late payments.

A: Yes. Anyone you have had a financial relationship with, past or present, will show on your credit file.

We are happy to help

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Call us on 0161 741 3160

Or email us at marketing@no1copperpot.com