Credit Scoring

Does my Credit Score Matter?

We often hear things about credit scores and it can be a bit confusing. You may wonder whether your credit score will even matter, what it is for and who will look at it. It is a good idea to be aware of these things so that you know whether you need to take any action.

What is a Credit Score?

A credit score is actually a fictional thing. In the UK we all have a credit record though which has all sorts of information about our finances recorded on it. It will list any CCJ’s we have had, missed repayments, what money we currently owe and what bills we pay as well as identifying information such as our address and whether we are registered to vote. We can all look at our own credit record for free and see what information is on there. Sometimes they are not correct and will need to be changed but usually they are an accurate record.

Why Does it Matter?

The credit record is used by a number of people. If you apply for a loan, then the potential lender will look at it and will want to see evidence that they can trust you to repay the loan. A potential landlord will look at it to see whether they can trust you to make the necessary regular monthly rental payments. A potential insurer may do the same and they may not allow you to pay monthly if they fear you may not be able to meet all of the payments. Utility suppliers will also take a look and they may request that you use a prepayment meter if they feel that you are unlikely to be able to manage to make the monthly payments. There may even be some employers that will take a look at it.

This means that it is an extremely important thing. You might think that it does not matter that much to you but, you never know when someone might want to take a look at it. You may not be responsible for the household bills or have a need to borrow money, but you never know when you might and so it is a good idea to be well prepared for the future. Missed repayments stay on the credit record for quite a while and CCJ’s even longer which means that it is important to try to avoid doing this and make sure that you keep everything in order so that you have a better chance of being able to get all the products that you apply for when you need them.

It can be a little confusing that different people that look at your credit score will be looking for different things. They will all have different criteria that they use to judge you. However, it is most likely that they will be wanting to make sure that they can trust you to be responsible with money and so proving that is important.

When Might I Need it?

Therefore, you can see that you might need to have a good credit record in certain circumstances. If you are looking for a new job, then it could be really important. It could also be important if you are applying for a loan, trying to move house or even switching utility suppliers or insurers. Therefore, making sure that it is correct and that it looks good is really important too. So, make sure that you try hard not to miss any payments, that you do not have too many loans and that you always make the repayments on time and this could make a big difference to you.