A credit score, also referred to as a credit rating, is a figure which tells potential lenders how likely it is you will pay back any credit that they choose to lend you, and therefore how much of a risk it would be to lend to you.
Any bank, loan provider, or credit card company that you approach will request to see your credit history. Your credit history includes previous loans, previous repayments, existing loans still being paid, and use this to calculate your credit score.
Credit scores are usually a figure between 0-999, where the higher the number the better for your likelihood of being accepted for credit at good rates of interest, although sadly having a great score does not mean that you will automatically be granted it.
You may think that credit scores are only relevant for big investments but don’t make the mistake of not caring about your score until you need credit as this is not the case! Credit scores are often considered when you are sorting out mobile contracts, car and motor financing, monthly insurance payments, and property rentals – not just for mortgages and credit cards.
There are credit companies that allow you to check your current credit score for free, and tell you what credit band you fall under, as well as what this likely means for any credit you may try to take out.
Has our credit score series has made you curious to know more about your credit score?
You can access a detailed copy of your own credit report through CheckMyFile.*
*Where you access the services of CheckMyFile through the link above, Lendwise will receive a small affiliate fee.