Your credit score is a primary consideration which lenders look into when you apply for short term loans, payday loans, and the like. They check your rating to assess your capacity to manage debt. Your credit rating clues them on whether you’d be a risk or not. Scores can be checked for a fee. Some sites offer free credit checking online. You can try them out to get an idea of how you fare.
In the UK, ratings vary between Credit Referencing Agencies or CRAs. For instance, Experian scoring prefers 700 above while Equifax ranks you good from 660 and higher. Noddle ranks you excellently from 3 and above. You can request official reports from these CRAs at least once a year with a minimal fee.
A bad credit score will make it difficult for you to secure loans, even short term ones. That's why it's important to work towards maintaining a good credit rating even when you have no intention of borrowing money any time soon. You never know when an emergency may come. So, it is important to watch the way you handle your finances early on.
What affects credit score and how do you achieve a good rating? There are a number of factors. Start by paying your bills on time. Whatever utilities and obligations you have now, settle them by the due date. Schedule payments for water, electricity, and mobile phone bills around your budgetary flow so you can meet each bill as they become due.
Do you have credit cards? Pay on time. Keep the balances low and avoid maxing out your credit line. Maxed out cards can look like you're in trouble managing your finances and that may discourage lenders from granting you a loan.
Is your name on the electoral roll? Make sure that you are listed. It's because many lenders check this to confirm a borrower's location and to check for stability. There are more ways to build a good rating. Start with these 3 mentioned and you’re on your way to a good start.