Credit Score Explained

In very simple terms your credit score is a snapshot of how your credit profile has performed and how you have managed credit repayments over the last 6 years expressed as an overall summary number. Loan companies use your credit score alongside your individual payment profiles on specific credit accounts you have (such as credit cards, mortgages, personal loans and secured loans) to decide how much of a credit risk you are when you apply for a loan . Thus it`s important that you try to maintain a `healthy` credit score whenever possible.

My Sort of Loan also use your credit score as a part of our decision making process when we come to place you application with our panel of lenders. Our qualified mortgage advisors perform a credit search as a part of our diligence and compare your credit score against our lenders criteria. This is to match you with the best possible homeowner secured loan or personal unsecured loan deal for you. In general terms the biggest impact to lowering your credit score is usually adverse credit within the last 4 - 6 years. Specifically; county court judgements, defaults or mortgage arrears will lower your score. Therefore you might believe that if you`ve never had any financial difficulty your credit score should be pretty high - right?

Well not necessarily, you see your financial history is only one factor amongst many others that determine your credit score. Other factors can include how old you are, where you live, whether you registered on the electoral, your occupation, who you live with and how long you have lived at your current as well as many other important indicators.

At My Sort of Loan we look at the whole picture that comprises your credit score to try and not to miss an opportunity to get you the best deal on your loan application. After all, whilst some companies might be satisfied to hang their hat on credit scores alone, we feel that there`s always an argument to be made on the basis of good old fashioned common sense and good decision making. If you feel like you are missing out on obtaining a competitive loan because you have been told `no` due to your credit score then consider contacting us. Complete our short online enquiry form (don`t worry no credit search will be carried out with this form) or call our loan team for free on a mobile or landline using 0800 0159 295 or dial 0330 0536001 (mobile friendly)


How To Improve My Credit Score

It`s fair to say that nobody is born with a good credit score. It develops and is to an extent `earnt` over time. If you`re young and just starting out you may find that you aren`t being offered the very best finance deals. Perhaps you are older but you`ve had a tricky time of it (in terms of your finances) over the last couple of years and your credit history is reflecting negatively on your current credit score giving the same nett effect of struggling to get decent loans / finance deals.

So if you find yourself with a low credit score what can you do to change it? Well it depends what your problem is, if it`s that you`re young and you don`t have much a credit history there`s some inevitable news - it`s difficult to age quickly. On the plus side however, you have plenty of time to build up a good credit history so at least you`re one up on the rest of us. A couple of simple things could help:

Be on the voters roll and try not to move too often. This gives a sense of stability and traceability for lenders confidence.

Get a current account and use it, also consider taking on a low credit limit credit facility (such as a credit card) use it sparingly and clear the balance each month. This shows lenders that other companies have trusted you with accounts / credit and that you can make repayments on time.

On the other hand if you`ve had running credit but incurred some problems in the last few of years, or if you`ve been out of the UK for a while, there may be something that you can do to help. Just as your credit score is harmed when you are unable to maintain your credit commitments it is improved when you are seen to making payments to your creditors , so try to get back on top of repayments and clear any arrears. Some improvement can be seen if you repay adverse items and settle defaults, ccj`s or arrears. One option to do this is via a credit repair loan.

If you think that sounds a bit like a chicken and egg situation - as in you want a credit repair loan but don`t know where to get one with your credit rating?!....... This is where it may be helpful to know that My Sort of Loan have access to lenders who are not on the high street and who have credit repair plans that will consider adverse credit applications. Our qualified loan and secured loan (second mortgage) advisors will try to place your application with a lender who will accept your currently diminished credit score with a view to possibly moving to a more preferential rate that may become available as your credit score improves down the line. This way we can deal with your requirements today with an eye on improving things for your future.

  • Get the best deals from our lender panel regardless of your credit score - My Sort of Loan have access to lenders and plans which aren`t available on the high street (many of which do not deal with the public direct) so never assume that no company will lend you money until you`ve spoken with us too.

  • Low credit score? Not always a decline - not every lender on our panel is just concerned about your score, if you have a low credit score and need a loan talk to our loan team directly and ask about our plans for low credit scores.

  • Improve your credit score - repaying a second mortgage promptly and on time will help improve your credit score. Let My Sort of Loan select the best mortgage deal to suit your circumstances today and into the future.


Who Are Experian And Equifax?

Now that you have a good idea about what your credit score is, how to use it and how to improve it you`re probably wondering who these people are that go around telling everyone who good a credit risk you are? Well back in the good old days when the year started with 1970`s rather than a 2010`s and laptop computers were the stuff of science fiction (never mind smartphones!) you would often first apply to your bank for a loan. The local bank manager would review your application, look at how well your account was run, how much money you have in your account and how well he knew your parents and grandparents then make a decision.

The world has moved on a bit since then and with the advent of widely available information technology more and more information about how we earn and spend our money is being recorded, analysed and the results sold by big companies. Two of the biggest of these companies are Experian and Equifax, these massive international data crunching companies receive very regular packets of personal credit information from all sorts of sources all over the world including banks, building societies, credit / store card providers and other lending institutions.

Experian and Equifax then analyse and present this data in a format that is made available for lenders and other institutions to see with your permission. That is why when you apply for a credit you will normally always be asked for your permission to `have a credit search` carried out. This search is whereby lenders look at your credit profiles, payments and history in order to make a lending decision.


How Often Should I Check My Credit Score (And Why)

In the normal course of events your credit score shouldn`t be a massive daily worry, after all you probably don`t want to be applying for a every few years, let alone every day. As we said earlier though, if you want to have access to the best financial deals around it is important to maintain a good credit score. But if it`s not a daily worry how often should you be checking your credit score? Well your credit score can change month on month depending on what`s going on in your life and it makes sense to keep a watching brief to make sure that the information that`s been recorded about you is accurate and to address any mistakes so that your credit score isn`t unduly reduced. It is also important to keep track of new credit lines or new spending to make sure it is you that did the spending and that you have not become a victim of fraud. You are entitled to a copy of you record from Experian or Equifax for a nominal fee (around £2) so if you have not seen it for while then crack on and have a look.

That said, mistakes are rare and so long as everything is going well and you`re not planning any major changes then you might at the very least check your credit score every so often through the year . If on the other hand you`re looking for a good mortgage, homeowner loan or secured loan deal it`s worth taking a look perhaps once a month just to make sure that there`s nothing about to trip you up.

Whatever your credit score is and what you need to achieve, it`s always worth talking to one of My Sort of Loan`s qualified loan and mortgage advisors to find out how may be able to help you improve and maintain your credit score.