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Do you know your credit score?

Do you know your credit score?

Category: Credit cards

Updated: 24/03/2016
First Published: 23/03/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Being in control of your credit score can be key to ensuring you're able to secure credit in the future, as it'll give you the knowledge you need to make any necessary improvements. However, research from Amigo Loans has found that very few people know their score – and even worse, that the average UK credit score is "poor".

Majority not in the know

The research found that 88% of respondents don't know their credit score, and of those who do, the average score is poor, sitting at 567. The picture is even worse for those aged under 24, who have an average score of just 300, classed as "very poor". This means that they could struggle to secure the best deals (or even any deals) on mortgages, credit cards and even mobile phone contracts, and is why it's so important to get in control.

Older consumers appear to be slightly better off when it comes to their credit score, with those aged 45-54 having the highest average of 659 – but even this is still classed as a poor score under current guidelines.

This could make it incredibly difficult for the majority of consumers to find suitable credit deals, and in fact, additional industry research shows that half of UK adults are likely to be refused credit. This could impact anything from the ability to secure a mortgage to getting the best tariff from energy providers, with a failed check potentially having huge repercussions.

"There is a huge lack of understanding about credit scores," said Glen Crawford of Amigo Loans. "It's crucial that people who believe they have a chequered financial history take positive actions to improve their credit file, so they will be more likely to be accepted for mainstream financial products in the future."

Get in control

Knowing your credit history can make a huge difference to your credit future, so it's vital to get in control of your score. One of the first things you should do is find out what it actually is, which can be achieved by heading to specialist credit check providers (such as Experian CreditExpert), so you know where you stand.

Make sure to check that the information's correct and that there aren't any anomalies, and once you've got an idea of your score and are confident that it's accurate, you can start looking at areas to improve. You'll want to make sure that all old credit agreements are cancelled and that the electoral register has your up-to-date details, and sever old financial relationships if you're divorced or separated.

Then it all comes down to proper financial management. It isn't only those with poor financial histories who could be at risk of a less-than-perfect credit score – even missing a single repayment or dipping into an unauthorised overdraft can leave a black mark on your score, so it's vital to be ahead of the game at all times.

Always pay bills on time or ahead of schedule, and never miss a debt repayment unless you want to get into hot water. Avoid keeping a high balance on your credit card, too, and only apply for a product if you really need it – applying for numerous forms of credit in a year can lower your credit score, and if you've been declined for credit, stop applying! It's all about being in control and staying sensible, and if you make sure to get a handle on things and understand your score, you need never dip back into "poor" territory.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.