When you apply for any kind of credit, the provider looks at information from various sources to give you a credit score. It’s there to help them decide how you’re likely to use the credit you’re given, what kind of customer you’ll be and whether or not you’re a good risk.
Each provider uses a different system, but the basic sources of information are usually:
Any payday loans, changes to power or energy suppliers, fraudulent activity in your name (even if it was committed by someone else) and bill payments are also on your record.
Lenders use the information they receive to award points to your application. Each one does so according to their own formula. The number of points they award you is your credit score.
Part of it is about risk. Lenders want to know if you’re a good or bad credit risk – in other words, whether you’re likely to be able to pay them back. But they also want to know what kind of customer you’re likely to be. So they look at how you manage credit cards, for example. Or they think about whether you might be interested in their other products and services.
No. Every lender works out your score according to their own system – and they don’t usually share how they do so with customers or other agencies. In fact, their calculations might vary according to the product you’re looking for. However, you can request your credit history from credit reference agencies like CallCredit, Equifax or Experian. Most credit reference agencies offer a free trial period (some also offer free for life credit reports, such as Equifax (Clearscore) and Callcredit (Noddle)), so you may be able to get your information at no cost.
Yes. Credit reference agencies will include information about past activity to help lenders assess how you’re likely to behave. There are a few things you can do to improve your credit score:
Your credit history doesn’t mention:
Remember: if you’re asked about any of these things on your application form, you must answer honestly to avoid fraud. The lender will be able to check your answers.
This article is intended as general advice only which is not intended to cover specific circumstances and needs. The information in this article is also not linked to any of the products offered by Clydesdale Bank PLC.
Find your nearest Yorkshire Bank branch, Business and Private Banking centre or ATM
Call us to speak to an advisor or apply for a personal loan by phone
Got a question? Our advisors can help you find the answers.