Lenders use credit scores provided by credit reference agencies to determine an individual’s creditworthiness and eligibility for lending. Those with low credit scores may not qualify for long or short term loans. Improving credit score and creditworthiness means it is more likely that banks and credit companies will view a loan application favourably and not turn down the application to borrow money.
The credit score is an indicator of an individual’s ability to make loan repayments and meet financial responsibilities. How a person has previously managed repayments affects their credit score – this included previous credit cards, mortgages, bank loans and even mobile phone contracts. Credit payment defaults and county court judgements (CCJs) are also taken into consideration.
Being listed on the electoral role contributes to the overall credit score and rating. Not being registered to vote or not having much credit history impacts a person’s credit score and ability to qualify for long or short term loans.
To better meet long or short term lending requirements, individuals may improve their credit score by:
- Obtaining a credit report outlining their current financial outlook and score.
- Closing inactive accounts and maintaining necessary accounts.
- Paying outstanding loan, credit card and bill repayments.
- Be listed on the electoral role and registered to vote at a current address.
- Developing a healthy credit history.
Improving a credit score builds creditworthiness and shows lenders a borrower’s ability to responsibly repay money borrowed. Lenders are more confident to approve lending where credit scores are agreeable.