Credit scoring is a process used by lenders to assess whether or not they want to lend to you. The criteria differs from lender to lender and there is no universal credit scoring process. Credit reference agencies generate credit ratings, but lenders use these as only part of their decision when choosing who to lend to.
Your Credit History
Your credit score is based on a number of factors, including your credit history. This is the track record that you have built up over the course of your life, including whether or not you pay on time or miss payments. It also reflects other factors such as where you have lived, who you are financially connected to, whether you are on the electoral roll and how much you owe.
Cultivating a strong credit history is the best way to maintain a good credit score. This can be achieved in a number of ways.
Managing and Improving your Credit History
It sounds simple, but the key elements to improving your credit rating are paying on time and never borrowing more than you can afford to repay. This includes not just your bank and card debts but mobile phone, gas, electricity and other regular household commitments. Shopping around for credit makes good sense but some lenders might mark your score down if you have too many searches on your file.
Additionally, make sure you are on the electoral roll and keep it updated when you move house.
How Will my Credit History Affect my MYJAR Loan?
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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk