Checking your credit score

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Understanding your credit score

You have probably heard the term ‘credit score’ or ‘credit rating’ before. They are often mentioned in advertisements by financial companies or in conversation, and just because you have heard the term it doesn’t necessarily mean you know what it means. If that is the case, we are here to help you understand credit scores and point you in the right direction to find your own.

What is a credit score?

A credit score is a number which suggests a person’s creditworthiness, or how suitable someone is to receive financial credit. Credit score is calculated by looking at an individual’s financial situation when it comes to borrowing and spending habits. Things like credit history, level of debt, number of open accounts are all considered amongst other things.

Different companies use different scales of credit scores. Some have a limit of 999, others 850 or 710, it depends on the company. Just remember, the higher the score the better.

Why are credit scores important?

Your credit score can determine how much money you can borrow from a lender, the rate of interest you will pay back, how long you are given to repay and many other things. While it is not always the only factor which is considered by lenders, it is often the most important.

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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