What is your credit score and what boosts it?

Redlips

Well-known member
I have the credit score app on my phone.

I followed all of the tips of paying all the short and long term debt all and it has gone down.

Suggesting to purchase a credit card to improve my score, which I don’t want to do.

I have given up trying to work it out!

It says the average in the UK is 585.
 
Get a credit card, spend a fiver or something and pay it off in full every month. That kinda thing is meant to boost it.
 
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999 😎

Never had a credit card.

I don’t have any “tips” as such other than that I don’t really ever borrow any money (except mortgage), and I never miss a bill.
It won't be 999 if you've never had a credit card, surely?

I cleared a load of debt recently and my credit score went down from 676 -->665 out of 710 with Transunion (What Halifax use) because i wasn't using my available credit and had been paying my balance off at the end of the month before it had registered as a balance. you have to use it to get the score up.
 
I think too much importance is placed on the score. For starters some score you out of 500 some 700, some 999.

Lenders will use their own criteria as well. I think they are handy to check nobody has applied for credit in your name and to make sure you haven't missed any payments that you haven't otherwise noticed, or to get any admin errors corrected but I wouldn't worry about the number particularly.
 
Credit Score isn't really a thing in the UK. In the US it is huge and the score is the important thing. In the UK each agency looking to lend you money will have their own criteria which they will get from your credit report. The score is just a number calculated based off your report and different credit agencies calculate it differently.

Typically what a lender is looking for is a history of paying your debts reliably although some companies see this as a negative because there is no money in it for them if you do. I get 0% credit cards to pay my annual things like home insurance up front. The credit card companies don't make a penny off me in interest but they do get a % when I make purchases so they want to see high credit usage with reliable repayments. You can make your score go up artificially by taking out credit cards with large limits and never closing them. Some lenders would see that as a positive because you aren't exceeding your credit limit and others would see it as a negative (access to large amount of credit that they wouldn't be able to repay).

The only thing you want to make sure is that you don't have a load of searches at key times like when applying for a mortgage. Every time you apply for credit the lender will do a search on your file. Lots at once makes it look like you might be desperate for credit which they see as a negative.
 
Mine shot up the second I got a credit card, even though I didn't want one.
Just an extra step in paying for my shopping.

It's since plummeted because I moved house 2 months ago and Redcar and Cleveland Council are taking forever to update the Electoral Roll despite registering again the same week I moved in, not being officially registered to vote is a major negative apparently.

Obviously that's all from the soft Credit Score checks on banking apps.
 
It won't be 999 if you've never had a credit card, surely?
It is mate. I can't explain it other than to say that ts 100% the truth. Via Experian anyway.

I'm not sure whether this thing about having a credit card to boost your credit rating is a myth peddled by the credit card companies?

Or maybe Experian don't value it for whatever reason.
 
Mine is 837 out of 1000 with Clearscore. Never had a credit card but my name is on all our other financial obligations.

Credit card is in my wife's name and her credit score is like 998 or something
 
It is mate. I can't explain it other than to say that ts 100% the truth. Via Experian anyway.

I'm not sure whether this thing about having a credit card to boost your credit rating is a myth peddled by the credit card companies?
Having a credit card and not using it doesn't really tell them anything either.

See it like car insurance. If you were an insurer would you offer a lower price to someone that has never passed their test (no credit card history), someone that has passed their test but never owned a car (has a credit card but never used it), someone with 10 years no claims (regular credit card usage repaid in full) or 10 year of driving but 3 crashes (credit card history with regularly missed repayments).
 
Credit Score isn't really a thing in the UK. In the US it is huge and the score is the important thing. In the UK each agency looking to lend you money will have their own criteria which they will get from your credit report. The score is just a number calculated based off your report and different credit agencies calculate it differently.

Typically what a lender is looking for is a history of paying your debts reliably although some companies see this as a negative because there is no money in it for them if you do. I get 0% credit cards to pay my annual things like home insurance up front. The credit card companies don't make a penny off me in interest but they do get a % when I make purchases so they want to see high credit usage with reliable repayments. You can make your score go up artificially by taking out credit cards with large limits and never closing them. Some lenders would see that as a positive because you aren't exceeding your credit limit and others would see it as a negative (access to large amount of credit that they wouldn't be able to repay).

The only thing you want to make sure is that you don't have a load of searches at key times like when applying for a mortgage. Every time you apply for credit the lender will do a search on your file. Lots at once makes it look like you might be desperate for credit which they see as a negative.

Beat me to it, the whole "credit score" thing is such a US thing.

Each lender will have different criteria balancing risk and and the opportunity to make money and so how you fit into that criteria is what will drive the decision whether to offer you credit or not.
 
Are things like Klarna and ClearPay a good, bad or indifferent thing in regards to credit scores if they are paid on time?
If they are paid on time they are fine. If you use them a lot though then you get a lot of searches on your file so any lender looking at giving you a mortgage will look on that negatively.

Using credit is a sensible thing to do if you are sensible with your money. If you have £1k to spend and you can get £1k in credit interest free so you put your £1k into savings/investments then you get a better return than just spending the £1k. If you see the credit as a chance to spend £1k twice then that's how you end up in trouble down the line.
 
I've worked at CRA's in the past, the scores mean very little, they do in the US but not here. Just maintain your credit well and make payments, also make sure you're on the electoral roll at your address. Payday loans are negatives even if you manage them we'll, obviously the biggest factor to any lender is your income.
 
One more thing to add is that you should never use a credit card to withdraw cash. That includes things like gambling or purchasing foreign currency.
 
If they are paid on time they are fine.
Not necessarily, I used to work in financial services and when looking at underwriting a loan the use of short term credit from lenders such as Clearpay and Klarna etc can indicate a lack of disposable income each month, which would affect a lenders ability to pay if they did have a slight change in circumstances. It could also indicate personality traits that people aren't prepared to wait for "impulse items".

There are huge swathes of things that are factored in when underwriting a loan far more important than a credit score. A credit score is just the first step in the filtering process. What having a high credit score may do, is negate the need for a credit application to go to a human underwriter, which is where all the granular detail is scrutinised.
 
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