Your credit score – or rating – is a tool used by lenders to help them determine whether you qualify for borrowing credit, such as a credit card, loan, or mortgage. The number you’re scored with gives them an indication of how you’ve managed debt in the past and how likely you are to stick to the agreed terms when it comes to paying back what’s owed. Many companies use it as a gauge to predict your future financial behaviours before you’re approved.
Having a good score is important as it indicates that you’re likely to be financially reliable, and likely to pay your bills on time. The higher your credit score, the better chance you have to be accepted for credit, at the best rates. Lower credit scores, on the other hand, can have the opposite effect.
A good salary – while helpful – doesn’t always equate to a great credit score as income generally isn’t considered in scoring systems. There are lots of other factors that credit agencies do take into account when calculating your score, though. Read on for more information on some factors that could affect your credit score and what you can do to keep it high.
There are a number of factors that can affect your credit score. The following could help keep it in the high numbers, or help improve it:
If you want to keep your credit score in good standing, you should be aware of the following, which could bring your rating down: