Understanding your credit score; what affects your credit score and how to find out what it is


When working out your credit score, a credit company or lender will take a range of factors into account. If you have a good credit score, it’s easier to get credit and you may be charged a lower interest rate. How do you find out your credit score and what affects it?

Finding out your credit score
Although most credit providers have their own individual system of scoring, they do take common factors into account. You can get an idea of your credit score by applying to one or more of the credit reference agencies. This won’t necessarily be the same as the credit score that a credit

The three credit reference agencies, Equifax, Experian and Call Credit have their own scoring systems and will tell you your credit score – normally if you pay a fee.

Getting your credit score for free

The credit reference agency Experian has launched a service called Credit Matcher, which gives you free access to your credit score for life and will tell you whether or not you’re likely to get a particular loan or credit card before you apply for it. You can get access to your credit report and your credit score for free from Noddle, which is a service owned by Call Credit. Full Disclosure: I write an editorially independent newsletter for Noddle, which I get paid to do, but I’m not paid to publicise or advertise Noddle.

SAVVY TIP: It’s important to know that the credit score provided by a credit reference agency won’t necessarily be the same as the one that a particular lender would give you.

General factors that reduce your credit score
Although different banks and credit providers have their own, unique credit score system, there are some factors that most take into account. These include:

1. Your home: Whether you own or rent your house, how long you’ve lived at your address and information about your postcode (the type of people who typically live there).

2. Court actions: If you’ve been declared bankrupt (which is called a ‘sequestration’ in Scotland), taken out an individual voluntary arrangement or IVA or had a county court judgement or CCJ registered against you (called a ‘decree’ in Scotland) in the past.

3. Your credit history: How reliable you have been and how many credit agreements you have been able to maintain. Some lenders will be reassured if you have a number of credit agreements that you can comfortably repay, others may be concerned about the amount of potential credit you have access to.

4. Your credit activity: If you have no credit agreements in place (or none that you are currently using), that doesn’t make you a good risk in lenders’ eyes. They say it makes how you’d handle credit harder to assess.

5. The electoral register: The electoral roll or electoral register is used by lenders to verify that you are who you say you are. You can register to vote online on the Gov.uk website at register to vote or if you’re in Northern Ireland, you can register to vote at the Electoral Office of Northern Ireland website. If you’re not on the electoral register, you will be marked down.

6. Your stability: Prospective lenders don’t really like change, so if you’ve recently changed jobs or switched bank, you’re likely to reduce your credit score.

7. Your job: Whether you are self-employed or employed and the level of your salary or earnings may also affect your credit score.

8. Other factors: These vary widely, but may include whether you’re already a customer of the company and/or whether you’re married or single.

Women and credit scoring
If you’ve taken out credit agreements in your own name and managed them well and you’ve not changed jobs every year or two, you could have a good credit score, but your score could be lower if you’ve not had much credit in your name or if you have no independent income. For example:

  1. 1. You’re a secondary card holder on credit card agreements. If your partner has a credit card account and you’ve been given a second card, that won’t show up on your file.

2. Your employment record is patchy (if you’ve given up work to look after children).

3. You have no independent income.

4.The accounts you have in your name were opened many years ago. At the moment, credit data isn’t shared from many accounts opened before the late 1990s, so if you have a bank account and credit card that you’ve had since the mid 1990s, it may appear to other lenders that you’ve never borrowed money.

Related articles:

Understanding a default notice – what it means if you have one

What can you do if your partner is controlling or abusive about money?

Linked credit files; how your partner (or ex) can affect your credit rating.

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