What is my credit score?
What is a credit score?
A credit score is a number built up by lenders to help them make a decision whether to accept a credit application. It helps them quickly assess whether the money they lend is likely to be paid back. It can be made up of the following information:
- The information held on your credit report.
- The information you provide on your credit application to them – this might include the time you’ve lived at an address or your income for example
- The lender’s own customer profile – lenders may have an idea of the people that they will lend to. For example, some may accept people who have made late payments in the past but others may not – always be aware that the greater level of risk a lender takes, the more the interest rate is likely to be.
- The lender’s information on its existing customers. If you already have an agreement with a lender, they may take your previous history with them into account.
back to top
How can I find out my credit score?
You do not have one credit score
They are calculated at the time of the application you make and as circumstances change, the credit score will change with them. Different lenders take different factors into consideration so it is unlikely that two lenders will issue you with the same score. The most important thing is to make sure that the information that lenders use to calculate your score is accurate.
You can get an idea of how your credit report impacts upon lending decisions from the credit reference agencies. This is based purely on the information held on your credit report, it will change as the information changes but you need to bear in mind that it may not take all the information into consideration that a lender does. It is unlikely to be exactly the same score that a lender will use.
back to top
Credit report facts and fiction
You only have one credit score
You do not have a single credit score. Credit scores are calculated at the time you make an application for credit and it is dependent upon the information held about you at the time and the factors that the lender takes into consideration.
Checking my credit report will affect my credit score
You can check your credit report as many times as you like and it won’t affect credit scoring. A record of the fact that you have checked your report will be kept but this won’t be seen by lenders and it will not be factored into their credit scoring process – the fact that you have checked will be seen only by you when you apply for future credit reports.
back to top
|
