A GUIDE TO Credit Scores FOR ABSOLUte BEGINNERS
but first check your score
Here's a few platforms that we're affiliated which will provide you with your score.
£14.99/month - 30 day free trail
The UK's only multi-agency credit report; provides an overview of your scores across each of the CRAs (which can differ). Although expensive and has no app, simultaneously correcting information across each of the CRA's is a huge time saver. Provides credit mentoring, fraud support and a 30-day free trial.
A free Experian account lets you access your Experian Credit Score which is updated every 30 days each time you log in. In addition to your score, you can access comparisons of credit products + the likelihood of being accepted for credit cards, loans and car finance.
Experian Credit Expert
Try it FREE for 30 days then £14.99/month (for new customers only)
This is the premium service provided by Experian. Great for those on a mission to boost their score ASAP. Your updated score is available daily and there’s full access to your Experian Credit Report. Experian show what is impacting your score and you can build a bespoke plan of how you may be able to improve your score based on your credit usage. The subscription also includes change alerts, dedicated fraud support, and phone support from experts who can offer help and guidance about your report and score.
What is a credit score?
You’re here because you want to learn about and improve your credit score. So what is a credit score?
So your score is a number that estimates how likely it is that you will pay back your loan.
Your score can differ depending on who provides your score but the rule of thumb is the higher the score the better.
Credit scores are basically how lenders check out whether you'll return their money on time
Why it matters?
A good credit score means lenders are more likely to see you as a low risk borrower.
How is that a benefit?
This means you have a better chance of getting the most competitive interest rates on loans.
The lower the interest rate is on the loan, the cheaper that loan becomes. All in all a good credit score can lead to a house becoming more affordable.
How to check it?
In the UK 'Credit Reference Agencies' (CRAs) are responsible for compiling your credit history and providing you with a credit report, which contains your credit score.
They are all obliged to provide you with a copy of your credit report for FREE!
What is a good score?
Lenders have their own criteria but if you have a good score with one of the main CRAs the chances are you will have a good score with your lender.
Different CRAs have different score ranges so what classifies as a good score with each agency.
How to build your credit score from scratch in 5 steps
It's difficult to get a credit score if you don't have credit history. But it's hard to have a credit history when you can't get credit. It's a chicken and egg situation, so here's how to build your score from the ground up
1. Open a uk bank account
It’s the start of a long and beautiful relationship. It means lenders can verify where you live and you can show them how well you manage your £ and payments.
2. Register to vote
Exercise your democratic right AND look good to lenders. Make sure your registered details are accurate.
No problem, send the CRAs a document to prove your identity and address.
3. Consider getting credit and manage it well
Your goal is to show lenders you can borrow money responsibly
You could start off by asking your bank for an overdraft facility - you don’t have to use it (overdrafts can be an expensive way to borrow).
Just make sure to ask how likely you are to be approved before you apply/ use ‘eligibility checkers’)
Pay with direct debits where possible but make sure you have enough money in your account - time them to coincide with payday.
4. once you've built up your score, look into getting a credit builder card
Designed specifically for people with little or no credit history but be careful - they have high interest rates!
Use an eligibility checker before you apply
Make small regular purchases with it and don't go above the credit limit
Always pay your statement balance on time and in full
5. once your score is up, consider a better credit card
The one's with an interest free period, perks, the good stuff
Same rules apply as with a credit builder card
DON'T go all guns blazing and apply for loads at once, play it cool.
A bad rating is for life
A fee you pay to the fund manager or investment platform
Checking your credit rating damages your credit rating
You can check your credit rating as much as you like. What does impact your rating is trying to open too many lines of credit at once, so try to space out any applications.
There is a credit score ‘Blacklist’, ‘naughty list’ or universal score that all lenders have access to
Nope! In fact, all lenders look for different things when lending, so don’t freak if you receive a rejection.
If you live with someone with a bad credit rating, you’re less likely to be able to borrow
Only if you’re financially linked (e.g. you have a mortgage together, a joint credit card, made a credit application together)