What is a credit scoreWhilst we have previously given a brief overview of credit scores, let’s get down to the exact details of what a credit score is. The credit score is all the information held on your credit report, and the score you have dictates whether or not lenders will lend to you or not, as well as the interest they will charge, and how much they will let you borrow in the first place if it at all. However, a credit score isn’t the same across all companies: lenders have different methods to calculate credit scores and they use different criteria to make their assessment as to whether you will be accepted or declined.
Credit scores are used to make decisions for applications such as:
- Credit cards
- Store cards
- Short-term loans, such as payday loans
- Entire repayment record
- Mobile phone contracts
- Secured loans
- Car finance
What is a good credit score?As previously mentioned, different lenders will use certain metrics in order to assess your application, and therefore they have different credit rating scores. Checking your score has been made a very easy thing to do, with the most reputable credit scoring agencies offering customers the option of receiving their credit file for free. We take a look at the three main credit rating agencies, and what is considered a good credit score for each company.
- Call Credit: A rating of 4 out of 5 on their rating scale
- Experian: A rating of 880 out of a possible 999
- Equifax: A rating of at least 420 out of a possible 700 on their scale