CREDIT SCORES IN THE UK March 12, 2019 – Posted in: Feature, General – Tags: credit scores, Practical Life, UK, United Kingdom
What are they and how to check yours?
Obtaining a loan, wherever you live, requires a credit score, which lenders use to evaluate whether or not to approve your request to borrow money. What is a credit score? Have you checked yours? Check this website to get more details.
If you’ve borrowed money before to buy something on credit, or to pay for a home mortgage or a car, or for school, or for any other purpose, you already have a credit score. Your score is how lenders rate you as a borrower. If you paid back your loan on time, you probably have a good score. If not, then you probably do not have a good score. If you’ve never borrowed before, a lender will create a score for you based on your ability to potentially repay the loan you’re asking them for.
Credit scores are three-digit numbers calculated by credit bureaus like Equifax, TransUnion, and Experian. Most financial institutions that give out loans like banks and credit card companies report your loan history to these Bureaus. They report whether you repaid your loan on-time and assess your ability to repay the loan you’ve requested.
HOW TO CHECK YOUR CREDIT SCORES?
It is your right to check your credit score regularly. If you plan to take a loan, it’s best to know your credit score before you formally apply so you will have some indication of whether or not a loan will be approved for you.
Credit Bureaus allow unlimited access to your scores online at a reasonable price and some offer a free trial. Just like the other applications online, register first and then follow the online instructions.
If you find mistakes and errors in your credit history with the Bureaus, you can always report such errors and request your report be corrected.
WHAT IS A GOOD CREDIT SCORE?
Credit agencies will state if you have a good or excellent score and would qualify to receive a loan. The factors they will consider are your prior history in repaying loans and your ability to repay the loan you’ve requested.
Those people who have good credit scores will be offered any number of tempting ways to borrow money such as credit cards, mortgages, and loans. Banks and phone companies may solicit your business to borrow from them, but be careful! It’s too easy to borrow too much and then face difficulty repaying the loans. Failure to repay the loans will mean you will not be able to borrow in the future when you may really need to.
HOW TO IMPROVE A POOR CREDIT SCORE?
If it turns out you had a low rating, your chances to borrow money are also low. No financial institution would take a chance of lending money to someone who they believe is not creditworthy. There are things you can do to improve your score – the first thing is to manage your debts well. Repay your credit card debts on time and don’t borrow beyond your capacity to repay. Try to pay more than the minimum payment. If you do otherwise, this may reflect that you are struggling to pay your debts. You don’t need to do this each month. Make it every other month or 7 or 8 times a year.
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If you apply for a loan many times in a year this may also give a notion to the lenders that you are suffering from financial crisis. So limit the frequency of your loan applications.
Credit ratings are all about your history in repaying loans and your ability to repay loans you have requested. Your race, religion, gender or physical attributes have nothing to do with it.