Finding out that a low credit score is getting in the way of securing the property of your dreams can be extremely disheartening. Thankfully, there are many ways to help build a higher score. Start off by learning more about them.
What is a credit score?
Your credit score is a three-digit number that ranges from 0 to 999 used to determine your creditworthiness for financial agreements such as a mortgage, rental agreement, loan or credit card. Your score can affect whether or not you are approved for credit as well as what interest you’re charged. As you may have discovered, it can also affect whether you are able to rent accommodation. If you have a high score, you are considered a lower risk, whereas a low score can be a red flag to creditors about your ability to pay. Lenders may have different views on what constitutes a good credit score, but the higher you can make yours, the better.
There are several details that make up your credit score, such as your address, marital status, and credit history. Your credit score can be affected by things like County Court Judgements against your name, insolvencies, and bankruptcy, as well as late bill payments or applying for finance too often.
How can I improve my credit score?
Here are a few simple steps you can take to help achieve a higher score:
- Keep your personal details up to date
- Make sure you’re registered on the electoral roll (especially after the recent changes in the electoral registration system)
- Ensure to pay your bills on time and don’t miss any payments
- Try not to apply for too much credit in a short period of time
If you’d like to find out more, the Money Matters team at Sainsbury’s Bank has created the handy visual guide below to explore when credit scores might be checked, along with ways to improve them.
