Your credit score is what financial institutions see when you apply for financial products. At a glance, they’ll know how much debt you hold, how often you’ve applied for credit and how often those applications have been accepted or declined. As such, checking your own score means you’ll know what lenders see when they look at your credit history.
Why should I check my credit score?
Whether or not you’re considering financial products, it’s vital to know your financial health.
It allows you to address any issues early on before they get the chance to grow. And if you do need to apply for a financial product, you’ll know the likelihood of acceptance.
Additionally, you’ll be able to spot loan applications or credit card use that might have been made fraudulently and be able to take immediate action.
In short, a regular review of once every three months or so means you have a greater grip on your financial affairs.
I’m worried about checking my score. Should I be?
There are common misconceptions about checking your credit score. The biggest is that doing so affects your credit rating. This is not true.
Although many believe that applying to see your score is a similar process to applying for a loan, and that any such application is stored with a black mark against your name, this is a mistaken belief.
Don’t worry. Checking your credit score does not affect your credit rating. It wouldn’t make sense to punish people just for keeping an eye on their finances.
How do I find out my credit score?
There are two ways. Both are pretty painless.
- Go direct to credit agencies
The most obvious way is to go directly to the credit agencies who hold and maintain this data: Equifax, Experian and CallCredit.
All of them offer a clear overview of your financial health, which they make available to financial institutions in the event of a credit application.
It’s your right to see the data they hold on you. You can apply online or send a written request by post. It’s important to note that directly approaching credit agencies for your credit score will incur a small fee.
Several companies offer free credit score checks. Choose a reputable site with a trust-worthy name you recognise.
In return for you free credit score, some sites will promote certain credit cards and loans based on your details. Remember, you’re under no obligation to take any of these. Ignore them if you so wish.
You’ll be asked to give your information and credit history, from addresses in the last three years to current debt and credit levels, just as you would with any financial service. These sites can then ‘find’ you and, using information from across all three credit agencies, build a picture of your overall financial health.