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Managing your credit score

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:

  • The application. The form you fill in contains some of the most important information, so take your time completing it and make sure you get it right.
  • Past dealings with the provider. The lender will look at whether you’ve used their products before, and how your accounts with them are performing.
  • Your credit history. Providers will ask credit reference agencies like Callcredit , Equifax or Experian to provide a rundown of your credit history. They’ll go to sources like the electoral roll, court records, the address information you provide and previous searches done on your name.
  • Other credit accounts. Credit and store card providers, banks, energy and mobile phone companies share details about your credit activity through credit reference agencies.

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.

Why do lenders need a 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.

Can I work out my own credit score?

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.

Can I change my credit score?

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:

  • Check your credit report. Make sure everything on there is right, and sort out any mistakes right away. This is the main thing lenders use to work out your credit score, so it needs to be absolutely accurate.
  • Look at your bank accounts. Current and/or savings accounts should be running as smoothly as possible.
  • Any missed payments on loans will reduce your credit score, so ensure you pay on time.

What’s not in my credit history?

Your credit history doesn’t mention:

  • Student loans post 1998
  • Arrears on council tax arrears
  • Driving or parking fines, paid or unpaid
  • Marital status
  • Applications that have been refused
  • Some defaulted or missed payments
  • PPI, CPP or bank charge reclaims
  • Whether you’ve checked your own credit file
  • Your race or religion
  • Savings information
  • Your medical history
  • Any criminal record
  • Payments to the Child Support Agency

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.


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