What is a credit score?

Your ‘credit rating’ or ‘credit score‘ affects what financial products you could successfully apply for as well as how much you might pay for them. Looking at your credit history can help you predict whether you would be accepted if you were to apply for any form of credit, or perhaps a new bank account. Different lenders use credit reference agencies to help them decide who to lend to. Each lender will assign their own score based on what they see on your credit history. As such, a ‘good’ credit rating can vary from lender to lender.

Someone with a higher credit score would appear less risky to lenders than someone with a lower credit score. If you have a higher credit score, you’re more likely to be able to borrow money and more likely to get a better rate of interest. In general, credit scores tend to range between 0 to 999, with being closer to the higher numbers the better.

Everyone has the legal right to see a copy of their credit report, so you can see how it fares before approaching a lender. You can check yours by consulting a credit reference agency, such as Experian, Equifax or Callcredit, and many of them offer free trials.