One crucial aspect of managing your finances is understanding your credit score. Nowadays, it not only impacts big financial agreements such as taking out a mortgage, but also smaller purchases be it a phone contract or car insurance. In this post, you will learn about what your credit score and report reveals about your finances, what factors impact your credit rating and why having a good credit score is so important.
When you think about your Credit Score think of it as your ‘Financial CV’. The only difference is that the creditors- not you- put information about you on there. This information is updated regularly and kept for a maximum of 6 years. It will show creditors how responsible you are with your money. From this, they will decide whether to lend you money or not and at which rate of interest.
Any service or products you purchase and use in advance of a payment being made is considered to be credit. For example, your mobile monthly contract, gas and electricity bill, direct debit, bank overdraft, credit cards, hire car purchases...you get the gist!
Limiting the amount of credit applications you make as every time you apply for something (car insurance, contract phone, loan) it goes against your credit score.
Credit is an important aspect of personal finance. This blog post will enable you to fully understand how the credit system works and to be responsible about building your credit score. We will talk about this more on the next blog which explains the sensible way to build credit. If you want to find out more about credit scores and reports you can stop by at any one of these credit expert companies: