We can’t all become an overnight credit expert and unfortunately we can’t always access a credit expert when we’re trying to understand how to improve our credit score. That’s why we’ve put together this helpful, 'straight talking' guide to understanding credit. It’ll only take a few minutes to read and when done you might just be in a more informed position when it comes to borrowing. Take a look at our credit cards.
The first step to managing your money is to understand credit and how it works.
Put simply ‘credit’ is borrowing money with the agreement to pay it back at a future date, for example, taking out a personal loan or a credit card is a common way of acquiring credit. Before a lender will agree to lend you money they’ll carry out a credit check. A credit check involves looking at your credit report and credit history together with other considerations such as your current financial situation. This is done to try and understand your ability to pay back the credit you acquire.
Your credit history is made up of factors such as previous borrowing history, repayment behaviours or any problems you may have had in the past with making repayments. Lenders have access to certain elements of this information and use it to make a judgement on the types and the levels of borrowing you could qualify for.
People often talk about having a good credit rating, a bad credit rating and no credit, but what does this mean?
With our eligibility check you are able to understand whether you may be accepted before you apply. Our eligibility check means we use a "soft" search to understand your chances of being accepted. This search will only be visible to you and us, will not be seen by other lenders and will not impact your credit score.
There are many advantages to having a good credit history. Good credit tells lenders that you are more likely to pay your borrowed money back at a future date. It also gives lenders confidence that you’re more likely to make payments on time.
Tips to help build good credit:
Your credit score plays an important factor in how lenders decide if they will lend to you. It can also affect how much you can borrow and sometimes the interest rate you’ll be offered. Different lenders have different scores, but common factors which affect your score include:
It sounds obvious but making sure you can make payments on time will increase your ability to access better deals in the long term.
Please note: The contents of these pages are not intended to be taken as financial advice or recommendation made by Creation Financial Services Limited or Creation Consumer Finance Limited. You should seek independent financial advice if unsure about your financial needs.