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Checking and Improving your Credit Score

Published on June 11th 2018 by knightwest

One of the leading estate agents in Colchester, Knight West has put together everything you need to know regarding your credit score.

Something you may not think of before buying a home is your credit score. Building up a good credit score is something everyone should look to achieve. A good credit rating is essential as it can affect your ability to get a mortgage or take out credit cards and loans. You are able to check your score online for free and with our advice below, hopefully, your credit rating will be better than ever!

What is a Credit Rating?
Your credit rating is information held on your credit file; also known as a credit report. Your credit rating can differ between lenders, depending on the criteria used when you’re assessed as a possible customer.
The information that’s held on your credit file will help lenders determine:
  • If you’re a successful candidate
  • How much money you’re able to borrow
  • How much interest to charge you
The latest information held on your file will be the most valuable to any lender, as they will be able to see what your spending is like and your current financial situation. Nevertheless, the last six years is still kept on record.
If you have previously missed any payments, most likely, this will not go in your favour. You could be charged a higher interest rate and might not qualify for some loans, due to lenders seeing you as a high-risk customer.
It is important to build up a good credit rating as it can restrict you from taking out mobile phone contracts or insurance.
How do you check your credit score?
There are many ways to check your credit rating online for free. Don’t be lured into agencies that offer a free month-long trial, as there is no need to pay at all.
Experian is a great website to check your credit score. They’re one of the largest agencies on the market today and offer easy, step-by-step guides.
What is a good credit score?
Different lenders have their own standards for ranking credit scores.
However, if you have a good score with one main credit reporting agency, it is more than likely you will have a good credit score with your lender.
A good credit score with:
  • Callcredit is scoring 4 out of 5
  • Equifax is scoring over 420 out of 700
  • Experian is scoring over 880 out of 999
But remember, your credit rating doesn’t promise that you will be approved for credit or offered lower interest rates. The decision isn’t exclusively made on your credit score alone.
How you can improve your credit score?
There are multiple ways you can help improve your credit score.
  • Register on the electoral roll
  • Make sure all information is correct on your file
  • Make payments on time
  • Check if you’re linked to another person
  • Check for fraudsters
  • Eliminate high levels of existing debt
If you’re struggling to increase your score, it might be worth considering getting a credit-building card.
How can improving my credit score benefit me?
A higher credit score means companies see you as a low-risk customer. You will be more likely to be accepted for credit.
The benefits of improving your score:
  • Lower interest rates
  • Higher credit limits
  • Access to more offers (Loan, credit card or mortgages)

Hopefully, this has given you a better insight into what a credit rating is and how it will benefit you.