What is a credit score and why is it important?

Credit score and why it is important

credit scoreWhen you apply for financial help from either a public or private organisation, they may wish to see your credit rating, or perform a credit check.

This section will advise you on this important assessment of personal finance.

What is a credit score/rating?

A credit score or rating is a number which expresses whether an individual can use credit safely and responsibly. The results of a credit check will give any lender an indication of your credit history, which will help them to ascertain whether or not they can trust you to pay back a bank loan or any other type of personal finance.

Why is it important?

credit score importantIt is important to maintain a healthy credit rating so that banks and lenders trust you to stick to any credit arrangements you may wish to make. Should you need finance to set up a business or buy a home, the results of a credit check will be one of the components used to assess the likely reliability of your repayments.

You can maintain a good credit rating by paying bills on time and avoiding unhealthy levels of debt.