Credit Score

Your Financial Report Card - Let's Make It Excellent

TL;DR Credit Score In A Nutshell

• Three digit number used to determine how reliable you are in repaying debt and bills, based on your financial history

• Factors influencing this include payment history, amount of money owed and how long you've used credit

• Good or Excellent score = lower risk for lenders so you are more likely to approved for loans and potential cheaper interest rates

• UK credit score range is 0 to 999 (Experian) or 0 to 700 (Equifax)

• Check your score by registering for the free account with these sites

*Coming January 2025

5 Factors Influencing Your Credit Score

The 5 key factors that are influencing your credit score are listed below:

• Payment History (~35%) - paying your bills on time, which is not an issue if you use direct debit to take payments automatically

• Credit Utilisation (~30%) - how much of your available credit you are using, aim to keep below 30%. For example, you have available credit of £1,000 but you only use £300, showing you're not overborrowing

• Length of Credit History (~15%) - its worthwhile keeping old credit cards open to boost the length of time you've been using credit.

• Credit Mix (~10%) - using a small mix of different credit options is ok as long as you are managing it. For example, having a car PCP loan that you're making repayments on alongside a credit card that you're paying off each month.

• New Credit (~10%) - opening up loads of new lines of credit all at once will damage your score so keep this in mind when you want to have that new credit card with all the bonuses and rewards

3 Quick Credit Score Tips

Now you know what influences your credit score, why waste time? You can do something about it now and strike while the iron is hot - here are 3 quick tips to help with your credit score:

• Pay one bill today - this payment will be reflected in your next score update

• Set up a direct debit for all your repayments - this should be the case anyway but review your credit arrangements anyway. Automating payments takes away the stress

• Check your free report - this is free if you go via Money Saving Expert's Credit Club, worth seeing where you are and if there is room for improvement

If you already have an excellent rating, congratulations! If you're not quite there yet, try the above and aim for excellence!

You've got this!