Whether it’s understanding your credit score, weighing up a long-term loan with your partner to cover the cost of a large purchase or even exploring the possibility of bad credit loans, do we really know what we mean when we talk about our personal finances?
Recently, Dot Dot Loans put their Facebook followers knowledge to the test to see what (if anything) they knew about finance, and the loan application process. Do you know what affects your credit score or what kind of loans you can and can’t take out? Their results may surprise you!
What do you think impacts your credit score?
Which do you think could impact your credit score? Being declared bankrupt? Missing a credit card payment? Well did you know that it’s more than just this? Registering to vote can help towards your overall credit score, but there are a number of things that can negatively impact it too. Whether that’s a county court judgment (CCJ) or missing a payment on your mobile phone bill; it’s important to remember when you take credit out with anyone to make sure you can pay what you owe each month, as well as making sure you pay on time. From the survey, only 44% of people knew that all of these factors had an impact on their credit score.
While there are many things that affect your score, be that positively or negatively, there are also a handful of factors that don’t. From being in arrears with your council tax, having a student loan, parking or driving fines and PPI claims; if you’re ever unsure as to what may or may not have an effect, it’s always important to check. From their survey, only 38% of followers knew that all of the factors mentioned here didn’t have an impact on their credit score.
Should you know what your credit score means?
Simply put, yes. It’s incredibly important you understand the basics around your credit score. Not doing so will reduce your chances of improving it if you need to, which could ultimately affect whether or not you can take out a loan, get a credit card and even apply for a mortgage. Around 91% of their Facebook followers agreed that yes, it is beneficial to know your credit score.
There are a number of platforms available online where you can see what yours is. Whether you are looking for a free service or don’t mind paying a small amount each month, head to sites such as Equifax, Experian and TransUnion to discover what your score is.
Don’t worry if your credit score is poor to begin with. Many of these services offer advice that will help you increase yours with simple and straightforward steps. Your score will take a while to mature and develop, so be patient.
How to navigate your credit score
Your credit score will typically show you the following information:
- A list of your credit accounts, including bank and credit card accounts, outstanding loans and utility company debts. Your file will also show whether you have made repayments on time and in full, missed or late payments and any defaults. These will remain on your report for at least six years.
- Whether you have any people financially linked to you. If you have taken out a joint credit card for example.
- County Court Judgements, house repossessions, bankruptcies and individual voluntary arrangements (if you have any). Again, these stay on your report for at least six years.
- Your current account provider if you have an overdraft.
- Whether you’re registered to vote.
- Your name and date of birth.
- Your current and any previous addresses.
- If you’ve committed fraud or someone has stolen your identity and committed fraud. This will be held under the CIFAS section.
Your credit score will never carry any other personal information such as your salary, any criminal record or your religion.
Once you’ve taken the time to understand your score and what it entails, getting your head around personal finance becomes a little easier.