Free Credit Score Information from MyCreditMonitor
Your credit score is a three figure number, usually between 0-999, which gives lenders and other third parties an indication of how trustworthy you are when it comes to making credit repayments.
Generally speaking, the higher your credit score, the better your credit history, and the lower the risk that you’re likely to have issues making your repayments - which is why more lenders will be happy to provide you with credit. Lower credit scores indicate that there’s more of a risk that you won’t be able to repay your credit, so some lenders may refuse to lend to you, or they may charge a higher interest rate on your borrowing to mitigate the increased risk.
If you’re looking to apply for any sort of credit, or submit any application where a credit check is part of the process, it makes sense to know your credit score. What’s more, once you know your score, it’s a good idea to do what you can to try and improve it. Read on to find out why.
What is a Credit Score?
Before we look at why you might want to improve your credit score, and the best ways of doing this, it’s a good idea to understand exactly what your credit score is. The upper limit of your credit score can differ sometimes depending on which Credit Reference Agency you are dealing with. For example, the maximum for an Equifax Credit score is 710, whereas Experian goes all the way up to 999, and a MyCreditMonitor report will score you up to a maximum of 710, because this is the highest score possible with Callcredit.
Your credit score is calculated based on personal details, e.g. your date of birth and address, your registration on the Electoral Roll and then the details of any current and past credit accounts that you may have held. Follow the link for more information about how your score is calculated.
How Does Credit Scoring Work?
Once your credit score has been calculated by the different Credit Reference Agencies, credit card companies, banks, and other lenders or organisations will compare it against their criteria for accepting your application in order to make a decision. As well as using it to help them decide whether to accept or reject you, it can also help them to decide what interest rate to charge you, based on the sort of financial risk that you may have.
You might come across credit scoring in a variety of situations, almost certainly if you’re applying for a mortgage, loans, credit cards or any other form of credit, but potentially also when you’re applying for a mobile phone contract, to rent a property, or even as part of a job application. Click on the link for more information on how Credit Scoring works.
Credit Scores, Ratings & Reports – The Difference
Your credit score is derived from the information in your credit report, and depending on the score you achieve, you’re given a credit rating. These terms can all get a little confusing, so lets look at how they’re related and the difference between them.
We’ve already looked at how your credit score can be any value from 0-999, and what information is used by the Credit Reference Agencies to arrive at this figure. All the details of your credit-related financial activity that they need, such as your current loans and credit cards and those you’ve had previously, are contained in your credit report - so you can see that this is a very important document that plays a key part in determining your credit score.
In order to differentiate between the various credit scores more easily, the Credit Reference Agencies have come up with different ranges they use to determine your credit rating. The complete range of possible credit scores from 0-999 is split into 5 smaller ranges, so you will be giving a credit rating depending on which of these ranges your score falls in.
Credit ratings typically vary from 1 or 1 star (poor) to 5 or 5 stars (excellent). So,F for example, if your credit score were between 0 and 559, your Credit Rating would be 1; and if your score were over 635, your rating would be 5. Find out more about the difference between scores, reports and ratings.
Check Your Credit Score for Free
Once you understand how important your credit score can be, it makes sense to know what it is. Yet, surprisingly, the majority of people don’t! In a recent survey we commissioned, 60% of those asked didn’t know what their credit score was, despite it being quick, relatively straightforward and, in most cases, free to find out.
You can check your credit score online in the privacy of your own home, by simply inputting some basic personal information, and answering some qualifying questions to help verify your identity. Within a matter of minutes you’ll know your credit score, and you’ll also be able to see all the credit activity the Credit Reference Agencies have on file for you.
Despite what you might have heard, the suggestion that checking your own credit report could damage your credit score is just one of a number of credit myths. You can check your credit report as often as you wish and it won’t impact your credit score at all - in fact it’s usually a good idea to check it regularly. Checking your current score is the first step towards improving it, which can have some significant benefits.
Benefits of a Good Credit Score
Regularly checking your credit report and making sure everything is correct and up to date, and taking steps to improve your credit activity, can improve your credit score over time. As we’ve already highlighted, consumers with better credit scores not only have a better chance of being accepted when they apply for credit, but they’re also more likely to get the best credit deals and lowest interest rates. So, taking a proactive approach to increasing your credit score could save you money in the long run.
How to Improve Your Credit Score
Depending on your circumstances, improving your credit score may take time, so it makes sense to start checking and monitoring your credit score sooner rather than later. Paying off credit accounts and reducing your overall debt may not be something you can do straight away, but there are some steps you can take which may have a positive impact on your credit score in the short term. Here’s our list of the top 5 things to do to get to work on improving your score as quickly as possible:
- Avoid late payments: This is probably one of the most important factors when it comes to improving your credit score. Making the monthly payments on your account in full and on time is the best way to show lenders you can be trusted.
- Check for errors: It’s not uncommon for there to be mistakes on your credit report, which could adversely affect your credit score. Check your details are right, and rectify any information that is not.
- Get registered: Being registered on the Electoral Roll will provide lenders with the reassurance of a stable background that presents less of a risk.
- Avoid repeat applications: When you apply for credit, it is typically logged on your credit file, so repeated applications in a short space of time can make you look desperate for credit, and lower your credit score. If you do get rejected, check your credit report to make sure there are no issues that need fixing, and try and improve your credit score before you apply again.
- Build your credit history: The more you can show lenders that you can be trusted to repay credit, the more likely they are to want to lend to you. Having no credit history can be as bad as having a poor one. Depending on your situation, taking out and properly managing a ‘credit builder’ credit card can improve your credit score and make you eligible for better credit in the future.
Hopefully you’re now much more informed about your credit score, how it can affect your everyday life, and the possible benefits of regularly checking it and working to improve it. So if you’re ready to get started, simply click on the button below.
What's Your Credit Score?
If you would like to know what your credit score is and the very best ways on how to improve your score, simply click the button below now to get started.Get your FREE credit report* Access Your Credit Report & Score*
* After your 30 day free trial, a monthly membership fee of £14.99 applies. You can contact us to cancel within your free trial and no fees will be payable. If you cancel after your free trial, no further monthly fees will be payable from the date of cancellation. However, no monthly fees already paid will be refundable. Full membership benefits are subject to credit reference agency validation of your identity.