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The credit score maze

After the money splurge of Christmas, now is good time to look at your finances. If you have an excellent credit score, you should be offered the best deals on credit cards and loans. The pandemic has messed up the finances of many people. As your credit report is important, have you recently checked your credit score?

credit score

3 wise Companies

In the UK, we have 3 credit reference agencies, each using different method to calculate a credit score. About 350m records a month are tracked. As a guide, the higher the score, the better a borrower looks to potential lenders. A credit score is based on credit history, the number of open accounts, the total levels of debt, and repayment history. It's no longer just about getting a mortgage, or credit card, as scoring is used for mobile phone contracts, monthly car insurance, energy contracts and other financial transactions.

Improving a credit score

These include:

  1. Register on the electoral roll, as it’s the easiest free method to boost a credit score.
  2. Demonstrate financial stability, by avoiding missed monthly repayments and stay within agreed credit limits.
  3. Check your credit report annually, to ensure the information held about you is correct and amend any errors.
  4. Close old accounts that are dormant, as the lender will look these unused credit lines.
  5. Take out a credit card to prove you can manage your debts sensibly.
  6. Ignore the size of your salary or amount of savings, as they don’t appear on the credit files.

A credit score is a financial footprint, showing bank and service providers how financially reliable you are. Many people have great credit score and are still rejected by a lender. Oddly lenders are credit scoring to see if the person matches their chosen profitable customers. Having a high credit rating doesn’t guarantee a lender will offer credit; each firm uses its own criteria, depending on type of credit product being sought.

ChildMax pays your take home salary while you’re on 12 months’ unpaid leave, caring for a sick child. It starts from £49.50 or for easy budgeting an initial payment of £8.25 followed by 11 monthly payments of £3.75.

 Visit at www.insurewithmax.com  or call the UK call centre 0333 323 0098 for more information.

 Sources:

https://www.investopedia.com/terms/c/credit_score.asp

https://www.moneyhelper.org.uk/en/everyday-money/credit-and-purchases/how-your-credit-score-affects-the-cost-of-borrowing

https://www.moneysupermarket.com/credit-cards/what-is-a-good-credit-score/

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

 

Date: 07 February 2022 by max robinson