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Know your credit score

Know your credit score

Category: Credit cards

Updated: 19/05/2015
First Published: 18/05/2015

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 It is now over 6 months old so the content may be out of date.

When used wisely, credit cards can be a great way to help manage your spending, but understanding how to make the most of them is key. One of the most important things you can do is know your credit score, but unfortunately, not everyone realises how vital it can be.

Lack of knowledge can cost

According to research from aqua credit card, a worrying number of people are completely unaware of how much their credit score will affect their everyday spending. The figures show that 25% of those surveyed think they won't be credit checked to open a bank account and 83% aren't aware that having a low credit rating can affect their access to the cheapest utilities tariffs, while 75% don't know that it could prevent them from being accepted for direct debits.

Furthermore, 79% of those surveyed have no idea what their credit score is and a further 53% don't know how to improve it, and 85% don't even bother to find out why they've been declined credit. In fact, 57% of those surveyed are at risk of being declined, which highlights how important it is to know your stuff.

The calculations show just how much you could lose out on if your credit score isn't up to scratch, because according to aqua, a poor credit rating could cost the average household an extra £1,170. So, if you didn't know how important a good rating can be – or how to improve it – it's time to take action.

Make the change

The first step to improving your credit score is knowing what your score is in the first place. Luckily, there are plenty of credit check providers that can help, whether you're after a one-off credit report or want to pay for a subscription so you can see how things improve, but either way, it can be just the thing to get started.

Once you know where you stand, you can get to work on improving things. You can find out more by reading our guide, but a few simple tips include making sure you're on the electoral roll at your current address, closing any credit cards that aren't needed, and keeping your balances as low as possible.

Not only will having a decent credit score mean you're more likely to be accepted for credit, but it can save you a small fortune, too, so make sure to know your credit score and you can be confident you're doing the best you can for your finances.

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.