Why it pays to keep track of the score of your credit
A SIMPLE slip-up such as failing to pay a bill on time could wreak untold damage on your credit score and make it harder to borrow money.
Failing to pay a bill on time could wreak untold damage on your credit score
Failing to enroll on the electoral register or having a joint bank account with an ex-partner could also affect your chances.
Credit scores help lenders decide whether to lend money, how much to lend and how much interest to charge.
Banks study your rating when deciding whether to offer you a mortgage, personal loan or credit card.
If you have a squeaky clean record you can access the best rates, otherwise you may be charged more, given worse terms or rejected altogether.
Yet half of Britons have never checked their credit score, according to research from RateSetter.co.uk.
Many are unwittingly doing something that may harm their credit score, making it tougher for them to borrow money in the future.
One in 50 has a joint bank account with their ex-partner
Credit scores help lenders decide whether to lend money
One in five has paid a bill late in the last five years
One in five has paid a bill late in the last five years while one in seven is not on the electoral register.
One in 50 has a joint bank account with their ex-partner, which can cause problems as you remain financially linked.
Jay Magee, head of retail underwriting at RateSetter, said: “Credit scoring is an imperfect science, but it is a really important part of the decision of whether to give someone a loan.”
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Half of Britons have never checked their credit score
Ironically, Britons who have never borrowed a penny may have a poor credit history as underwriters do not have enough information to judge their creditworthiness.
Magee said: “It is by borrowing money and paying back on time that you build up a good score.”
Check your score with credit reference agencies such as ClearScore.com, Equifax.co.uk and CallCredit.co.uk.