This one comes from David in Newmarket, and his question is: “What is a credit score?”
A credit score is a third party assessment of your ability to handle liability (li-ability), and is usually required, and obtained, to help staff members assess applications for things like loans, credit cards, mortgages, mobile phone contracts and store finance.
The following broad elements of your "profile" are usually taken into account:
Ratings for each element are then added together to produce a total or "score" - hence the phrase: "credit score".
Elements of your personal profile are "weighted" to either improve or worsten your total "score". Who you've applied-to affects which elements are weighted and how they are weighted.
Many companies take into consideration their past experiences when weighting specific profile characteristics. For example, a company may have experienced less hassle collecting payments from homeowners, hence homeowners may score higher than private tenants.
You can obtain a Statutory Credit Report from any of the major Credit Reference Agencies by sending them a cheque for £2.00.
In truth, a score is not ‘your’ score; it is their assessment (scoring) of you!
Think about the language they use. When you "score" something - you "cut it" or "mark it".
Perhaps that is why people say "I have a black mark against my name/address".
The main Credit Reference Agencies are
Ultimately, it starts with you. If you want to improve your credit score in the eyes of the main reference agencies; you’ll be interested to learn that we’re putting together a MasterClass which will not only help you understand how the scoring system works, but also, show you how to positively affect the score recorded against your name.
If that's something which would interest you, email us at [email protected]
We'll make sure we reserve you a space at the MasterClass.
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