Who actually looks at my credit score?

We hear a lot about how important it is to have a tip-top credit rating in order to get approved for credit – and to get access to the very best rates and deals – but who actually sees your score?

Banks and lenders look at your score

When you apply for a product such as a credit card, loan or mortgage, banks and lenders view your rating.

They will also look at your credit report from one of the agencies.

A credit reference agency is a firm which compiles information on your financial history. 

Are there lots of  different agencies?

There are three main credit agencies: TransUnion, Equifax and Experian, and they each give you a score.

There is no one universal scoring system for all three. Each has its own numerical scale.

The key thing to remember is that while you can’t compare your rating between agencies, the higher your score the better.

What do lenders learn from knowing your score?

Card companies, loan providers, mortgage lenders and other financial institutions look at your credit rating – and the information held on your credit report – to assess your ‘creditworthiness.’ They do this to try and work out how likely you are to repay your borrowing on time, and how much of a risk it will be lending to you.

Lenders will want to check that you have a good history of managing your money well, and making repayments on time. They'll use this information to try and predict your future financial behaviour.

Do they carry out further checks?

Lenders will also use other in-house checks. They are essentially carrying out their own credit scoring.

What does a high score mean?

If you have a good credit rating, you’re more likely to be offered the best deals on cards, loans and other products. This might mean higher credit limits, lower interest rates, and longer promotional offers.

Make sure your credit report is accurate and up-to-date

If any of the information held on your credit report is incorrect or out-of-date, this could impact on your credit rating. If you have a poor score, you risk getting offered less competitive rates or terms on your borrowing, or potentially being rejected altogether.  

Equally, even if you’ve got a high score, it’s still important to check the contents of your credit report are accurate.

Get a copy of your credit file

The best way to check everything is as it should be before applying for any form of credit is by getting hold of a copy of your report. You can do this for free with our  Credit Monitor tool.

(MoneySuperMarket uses data from credit reference agency, TransUnion, to compile your score and report via Credit Monitor).

What action should I take?

If you find any errors on your credit file, you should get these corrected right away. You can apply to have the information removed, or you can request for a ‘Notice of Correction’ to be added to your file. You might want to get one of these notices added if, say, you have missed payments due to illness or unemployment.

If you had joint accounts or credit cards with a partner in the past but are no longer together, you should take steps to ‘un-link’ yourself. If not, their habits could impact on your score. You can apply to get a ‘Notice of Disassociation’ put on your report to let lenders know you’re no longer financially associated with that person.

Keep an eye on your credit report

Once you’ve checked your credit file, you need to keep checking it regularly to ensure everything remains correct and up-to-date.

Take steps to boost your score

If you find your score is not as high as you’d like it to be, there are plenty of simple steps you can take to bump up your rating:

• Get registered on the electoral roll at your current address
• Be diligent about paying all your bills on time
• Close down any unused lines of credit
• Don’t max out on your available credit
• Show some stability. The longer you stay at one address or in one job, the better

You can get more tips here.