The following post is brought to you and contributed by an outside writer.
When it comes to the two biggest financial commitments you’ll ever make in your life,
unless you have an absolute ton of cash to splash, your credit score is going to come into
play. Of course, I’m talking about buying a car and taking out a mortgage (not necessarily in that order).
The thing is, despite the fact that your credit score is very important, it’s not something
you’re often taught about at school which is surprising. Naturally, understanding what your
credit profile is and how it’s influenced is a pretty important life skill. Having a good score
will open you up to the best deals and interest rates the next time you want that mortgage or new car, so it can make life’s challenges that little bit easier. Really, it’s not unusual to feel a little lost when it comes to your personal credit circumstances.
Credit reference agencies keep a record of your credit history on file and this information is
accessed by lenders whenever you apply for finance. Your report will contain your score,
address and any details of missed payments. In terms of the score itself, there’s no universal
number as it changes depending on the company you use. For example, Experian scores out
of 999. If you have a history of missed payments then this will work against you as lenders
will view you as more of a risk. This increased risk will usually result in a higher interest rate.
However, bad credit doesn’t necessarily mean you can’t get finance. You can read a little
more on the subject of bad credit by checking out the following bad credit car finance guide.
Understanding what makes a good credit score, and taking steps to improve it if required
will put you in a good position financially. Even simple things such as registering on the Electoral Roll and meeting your payments on time will help.
Check out the infographic below for a visual representation and stay on the road to good credit in the UK.