Why does a good credit score matter?

credit cards

Credit Cards

Like your family, you can’t choose your credit score. However, that’s where the comparisons with mum and dad end, as there’s plenty you can do to improve, maintain and find out more about your score – meaning you’re more likely to be accepted for credit cards, loans, mortgages and more.

No matter what you do, you’re tied inseparably to your credit score – it follows you round and dictates what you can and can’t have, whether you’re applying for credit, taking out a mobile phone contract or even renting a home. For many lenders, it’s the bottom line when it comes to making a decision about whether to accept your application.

Finding out your score
Due to the current economic climate, chances are you’ve seen plenty of adverts from firms offering to let you know your credit score. If there’s a free trial on offer, it’s worth considering taking it up, especially if you’ve got little or no idea what your score is at present. Of course, it’s up to you whether you want to continue with a paid subscription once the trial has run out.

Improving your score
While knowledge is power, being aware of your score is only half the battle. If it’s proved to be a nasty shock, you’ll want to look at ways of improving your creditworthiness. This isn’t an exact science and opinions differ on the best ways to boost your score. However, some obvious steps are bound to have some effect. If you’ve recently moved home, get on the electoral roll at your new address as soon as possible – checking these details is usually one of the first steps of a credit check.

Making sure you pay on time with your existing credit agreements is key, as is keeping within your credit limit. Opening several accounts at once is also considered a bad move, as lenders could be concerned that you’re set for a borrowing binge.

Maintaining your score
If you’ve got a good credit rating, don’t be tempted to rest on your laurels – a few bad moves and things could change quite quickly. Maintaining a good score also means that you’re more likely to have access to the best rates and the best credit card rewards, meaning you’ll pay less for borrowing the money you need.

Ultimately, being aware of your credit score and how you can keep it in good shape should be a lifelong commitment – which, to return to our original point, means you should treat it like your wife or husband rather than a blood relative.