Over the years we have heard, and been told, how important our credit score are. There are even adverts on the TV telling and showing us how these companies can help to improve our credit scores.
And our credit scores are important, as they are used in many ways. Some employers use credit scores to aid in vetting and hiring a potential employee. Insurers use credit scores as well.
As to the question what is a good credit score, the simple answer is, the higher the number the better.
There are many changes coming about regarding credit scores and credit scoring. Some countries are moving towards a social credit score, or social credit reporting.
To some this is a bit scary and Orwellian in what in encompasses, as it takes into account much more than how we pay our bills. It also carries with it further implications that just being denied a loan, or a job.
However for now, we may not be aware of some things we may do, and not do that may affect our credit scores.
Checking Our Credit History
We need to check our credit files on a regular basis, and what we are looking for are errors and omissions.
Maybe we have an account we have paid perfectly and it is not showing on our credit report. We need to have this corrected, and you can do this either via the lender/creditor themselves, or through the credit bureaus.
Maybe our credit file shows an account as being in arrears, or paid late, however, we paid it as agreed, and on time. This needs to be corrected.
These omission and errors lower our credit score. But how would we know if we did not regularly check our credit.
Applying For New Credit
Every time we apply for a loan or any form of credit, an inquiry or “footprint” is placed on our credit file. This footprint shows when we applied for credit and with who.
Too many inquiries in a short period of time reduces our credit score.
Lenders get anxious if they see too many of these, and credit bureaus can reduce your credit score based on too many of these footprints.
Moving house in itself does not affect your credit score, but not registering for the electoral role once you moved can impact your credit. Lenders use the electoral role to verify your address and who you state you are and where you live.
You need to remember to update this information when you move.
These are just a few ways we can accidentally or inadvertently lower our precious credit scores.