Let’s start with a very quick overview of what your credit file actually is 🔍
Your credit file is a record of your financial commitments
- credit cards
- bank accounts
- mobile phone payments
- and more…
Every on-time payment to each of these creditors is recorded on your credit file.
- If a payment is late or not made at all, this also gets recorded.
- This information (payments, late payments, as well as other information) then gets put together and comes out as what is known as a credit score.
- Most banks and other lenders use your credit score to help them to decide if it is a risk to lend to you.
- Which is basically them working out whether they think you will repay the money to them.
- Typically, the lower (or worse) your score, the fewer and more expensive the borrowing options.
The three UK credit reference agencies (CRA) are
Have a credit score that could be improved?