question category: Credit Rating

What is Credit Scoring? What is my Credit Score?
Submitted on: 16th Nov 2008 by Non-Member | Total Answers: 1

I know my Credit Score is important. What is a Credit Score?

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Credit Scoring / Credit Score

Credit Scoring is a number or score that measures what lenders believe to be your actual credit worthiness. This score forms what is know and your Credit Score. Each lender is different and will measure against information they think is important to a particular application. Things you’ll be measured against include:
 

  • Employment Status (Employed being better than Unemployed)
  • Salary (High being better than Low)
  • Electoral Roll (Being on it is better than not being)
  • Missed payments (A history of missed repayments reduces your score)
  • CCJ’s (Having them hurts your credit score)
  • Other applications for finance e.g. loans and credit cards (Being turned down by other finance providers goes against you)

A company will gather this information they need to credit score you from the information you provide and the information provided by the Credit Reference Agencies.

To ensure the credit score you are given is the right one make sure the information you give is accurate e.g. current and previous addresses, and the information you have on the credit file held on you by the Credit Reference Agencies is correct and accurate. Having the wrong information may mean you either can’t get the finance you wanted or you pay too much for it.

 

Submitted on: 16th Nov 2008 by TA Member

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