We know that buying a car can be expensive. That's why we offer car finance after all! But, did you know that in order to apply for finance with us we check your credit score?
Wait. What?! You don’t know what your credit score is? Don’t worry, it's fairly simple and we can show you how to check your credit score.
Why is knowing your credit score important?
Banks and finance brokers use your credit score to determine whether or not to give you credit, and how much to give you.
Put simply, your credit score shows lenders how well you handle credit and whether or not it could be a risk to lend to you.
Everyone has a credit score. But not everyone knows what their credit rating is, or whether it is good or bad. Luckily for you, we’ve broken down how to check your credit score.
Where can you check your credit score?
In the UK there are three companies that collect information on how well you manage credit and make payments. Once they have this information, they turn it into a clear and concise report. By using these companies, you can check your credit score. The three Companies are: Experian, Equifax and Callcredit.
We highly recommend Noddle, part of Callcredit to check your credit score as they send you a free credit score report monthly. Signup free for Noddle and monitor you score for free now.
Wait, what’s the difference between a credit score and a credit report?
Your credit score is a numerical value which is calculated from information in your report. This denomination allows lenders and landlord to predict how creditworthy you are – in other words, how likely you are to repay a loan and make the payments on time.
Remember, your credit score can change over time, reflecting current financial behaviours.
Your credit report is a summary of your financial consistency and includes your history of paying debts and bills, how many credit accounts you have and your payment history.
Which credit reference agency should I use?
To be perfectly honest, it’s best to use multiple credit agencies to check your credit score. This is because there can be differences in how they collect information – for example: how far back they go with your payment history, one agency may go back four years while another may go back further.
However, if you are applying for credit from a specific lender and know which agency they use, it makes sense to use that one.
What you should be checking in your credit report
Credit reference agencies not only allow you to check your credit score, but also make sure all of the information they have on you is correct. You should check your score and reports at least once a year. This is a case of maintenance more than anything else.
Some things you may want to check are:
- That all of your information is up-to-date (ie addresses on old-accounts)
- That you unlink any financial ties with ex partners
- That you are showing as being on the electoral register
- That you have cancelled any unused store or credit cards
Who can look at your credit score?
Companies, like Experian, may compile the reports, but they don’t just give out the details. Searches for your credit report can only be made with your consent. When you apply to a lender you give them permission to search your credit report.
Credit providers such as banks, building societies, credit card companies and finance lenders will need to look at your credit score if you apply for credit with them. But remember they need your permission to do so.
So now you know how to check your credit score, you can find out your credit rating. Head on over to CarMoney and find out how much you could be getting towards your dream car today.Posted 21/10/2016 Back to Blog