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Why Having a Good Credit Score Is So Important in the UK

Very few of us in the UK can get through life without having to take out a loan of some kind at some point in our lives. It may be the mortgage that we use to buy our home. It might be a loan to buy a car or finance improvements to where we live. It might just be the credit card that we use to cover unexpected expenses if they ever crop up. But before we can ever receive any of these the lenders in question will have done what’s known as a credit check on us to assess our ability to make repayments, as well as to assess the risks that we may default on them one day.

The Higher Your Score, The Greater Your Options

A vital piece of information they look for is the score that we have been given by one of the country’s leading credit reference agencies

The different agencies may have different scoring methods but all share the same principle. The more credit-worthy an individual is, the higher their score will be.

And it’s not just people with relatively low scores who are affected. Wherever you are on the scale your credit rating is going to affect the number of lenders who are prepared lend and it will even dictate the maximum you can borrow as well as the interest rate you will have to pay. The lower your credit score, the less you’ll be able borrow and the higher the rate will be.

While it can seem like you are powerless to affect your credit score in any meaningful way, there are certain actions you can take not just to protect it but to actually build it up.

Building And Protecting Your Score

One of the best ways to build up your score is to actually use credit, By showing that you can keep up with regular payments works hugely in your favour. There are even a number of credit cards specifically aimed at people with low credit scores aiming to build up a good credit history.

Something that can severely damage your credit score, however, is falling into payment arrears. This can be especially damaging if it’s a mortgage that you default on. So if you were ever to find yourself in this situation it would be essential to do all you could to stop repossession of your home.

A practical way to do this and avoid getting a very big black mark on your record could be to sell to one of the cash buying agencies out there. This would probably repay all the money you owe to the lender and start again with a clean slate.

On a more positive note, there are several other ways in which you can enhance your credit score such as registering to vote.

So, hopefully, this has helped to shed some light on your credit score and how to maximise it. Trust us when we say that doing this will make life a whole lot easier than if you don’t.

Good Credit Score Is So Important in the UK