Why It’S Good To Check Your Credit Score

Keeping your credit score healthy is important because lenders, credit providers and other organisations will check your rating in order to deem how creditworthy you are. Loan and mortgage providers tend to check your credit score and you may find yourself subject to a credit check when you rent a property, take out an insurance policy or apply for a new mobile telephone contract.

Your credit score is simply a numerical value which is calculated from a statistical analysis of your credit report. Your credit report includes different factors such as payment history, length of credit history, any outstanding amounts owed and types of credit used.

Paying your bills on time stands you in good stead whereas lenders may be more reluctant to borrow to someone who has a history or missed and late payments.

Your credit score is a good indication of your credit rating, which is like an overall view of your credit profile. Your credit rating is essentially a ranking which lenders will calculate based on the detailed financial analysis of your credit report as well as other information including your name, electoral register records, credit payment history, County Court judgements, bankruptcy orders and house repossessions.

There are various different factors that can affect your credit rating and it pays to be aware of them so you can keep your financial outlook as healthy as possible.

To find out what your credit score is and get an idea of the credit rating lenders could give you, request a copy of your credit report. You can request this from a credit reference agency. The three main agencies in Great Britain are Experian, Call Credit and Equifax.

If possible, check with all three credit reference agencies as each can hold different details about your rating and there is no harm verifying with each. Contrary to popular belief, carrying out a check on your credit file does not leave a trace for lenders to see and it does not in any way lower your credit score or rating.

Applying for new credit is generally what lowers your credit rating whereas ordering a copy of your own credit report doesn't count. If you do apply for new credit and are refused, avoid making repeated applications with different lenders as this can adversely affect your credit rating.

Your credit rating may also be made up from details of your income, employment status and assets. All this information is amalgamated to help lenders decide how much of a risk they are taking by choosing to do business with you.

It's worth carrying out a regular credit score check as any errors on your file can cause you problems further down the line. It’s a good idea to do a check-up roughly every 12 months, and always do one in good time before making any important applications.

Paul Buchanan writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
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