Jargon buster: What is a credit score and why does it matter?

What is a credit score?

Your credit score is a three-digit number. It’s calculated from the information a credit reference agency (CRA) holds about you. Your credit score usually comes with your credit report, which gives you more details about your credit history.

Lenders use your credit score, plus other information, to decide whether they will lend you money.

The better your score, the more doors open for you in the world of credit. Think mortgages, credit cards, or loans – the cream of the financial crop. And that’s not all – having a stellar credit score means you get the best deals in town. Higher limits, lower interest rates, great cashback etc.

Here’s a quick rundown on what those digits really mean:

0 – 550 = Very Poor
551 – 565 = Poor
566 – 603 = Fair
604 – 627 = Good
628 – 710 = Excellent

However, don’t let past slip-ups haunt you forever. We’re all human, and mistakes happen. Now, let’s talk about how you can give that credit score a makeover.

First up, keep tabs on your credit report. It’s like a real-time reflection of your financial health. Check it regularly, and if you spot any errors, don’t fret. You have the power to dispute them. And trust me, fixing these hiccups can do wonders for your credit score.

Being on the electoral register is another game-changer. It’s not just about voting; it shows lenders that you’re settled and stable. Whether you’re a student or a seasoned professional, make sure your address is consistent on credit applications.

Lastly, financial ties – they matter. Joint mortgages, shared bills, or acting as a guarantor can impact your credit score. Even if things change – relationships end or you move – it’s wise to keep an eye on your credit report to ensure it’s all up-to-date.