It’s very important to be aware of your credit score and to check it regularly.
A healthy credit score goes in your favour when applying for loans, credit cards, and mortgages and there any other companies who will also do a credit search, for example:
- utility companies
- landlords
- mobile phone providers
- and even some employers
A poor credit rating doesn’t mean you have to go into panic mode. However, it is important to monitor and manage your credit report. Here’s how credit checks work, and how you can check your credit rating without damaging it.
What’s a credit check?
There are two ways of checking your credit score, categorised as a soft check or a hard check. A soft check involves a lighter, preliminary look over your credit file, which won’t affect your credit rating. It can be carried out by lenders and other organisations such as phone companies to assess eligibility. Of course, you can carry out a soft check yourself.
A hard check is carried out when applying for, such as loans, mortgages or credit cards. It’s an in-depth assessment of your credit history, and it will be visible to other lenders on your record. Any negative marks, like evidence of overdue payments, will stay on your record for several years, so hard checks can impact your credit score.
Why check your credit?
Of course, knowledge is power, and checking your credit score regularly is more important than ever. It helps you:
- To view what financial-related information the credit agencies hold on you
- To increase your understanding of your financial circumstances
- To identify and correct any inaccuracies or errors in your report
- To improve and maintain a good credit score
You can keep track of your credit rating without incurring any fees or indeed affecting your credit score. There are companies who provide free credit score checks. They have easy-to-use apps, advice, support, and handy dashboards to access and absorb the information you need.
Here are some of the free online credit score checking services we recommend and the credit reference agency each one uses:
- MSE’s Credit Club – uses TransUnion
- Credit Karma – uses TransUnion
- Experian – uses Experian
There isn’t one universal UK credit score. Each credit reference agency uses its own scale, so your score may differ depending on where you check it.
Remember that you can check your own credit report and credit score whenever you wish and as many times as you wish, because checking your own report leaves no footprint and will not impact your score.
I’ve checked my credit score, what now?
If you have a poor credit score and you want to improve it, our Save and Borrow loan helps you rebuild your credit rating to access better borrowing opportunities in future.
You might also want to check out our blog on 10 ways to improve your credit score. Remember, when money is tight, improving your credit score should never come at the expense of essential bills or day-to-day living.
If your score is healthy and you’d like to borrow money responsibly, view information about our fast, fair, and flexible loans available to all GMB members here.