Credit scores are one small part of life, but they don’t always feel that way. When you have a low score, it can feel like there are big barriers all around, holding you back and stopping you from accessing the things you want or need. This can be frustrating – particularly when you are confident that you’ll be able to afford the repayments.
Confusingly, each credit reference agency uses a slightly different scale and scoring system to present your credit score. However, one thing remains the same; the higher the number you are given, the better your credit. Rebuilding your score and getting that number up is a process that takes time and commitment – but it can be done.
To make steps towards improving your credit score, it’s important to first understand what kind of information companies and credit agencies take into account when calculating your number. Each of the following points has an impact on your credit score:
- Missing payments. Unfortunately, missed payments, even when they come from a small oversight on your part, can spell big trouble for your credit score – with defaults haunting your report for as much as six years.
- Having little or no credit history. It seems unfair, especially considering that you’ve never technically missed a payment. Lenders like to see a good track record of finance you have borrowed and paid back in good time – there are plenty of little things you can do to start building a positive credit history.
It’s important to remember that different companies, and indeed, credit agencies use different information to calculate your credit score – often assigning their own values to relevant pieces of information. This means that the various ways that companies respond to your applications aren’t always directly comparable. Just because you don’t get the result you want with one doesn’t mean that you won’t with another.
Remember that your credit score also changes from month to month. By knowing and understanding these facts, you can make sure it journeys slowly but surely up into the green, rather than creeping down deeper into the red.
If your credit score is holding you back, turn to us at Fair for You. We offer flexible repayment plans on household essentials and more. Yes, we do run credit checks but our decision isn’t only based on your credit score.
It can, however, be really crucial that you improve your credit rating in order to get a loan. Find out more about our approach to credit ratings, or watch our video on what to do if your loan was declined.