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Does my credit score affect my finance application?

Most of us have some form of debt, whether that be a mobile, a credit card, a loan, or a mortgage. Your credit score will reflect your history of repaying these debts, and how reliable you are at paying on time.

Your credit score is available to any lender who you are asking to borrow money from, and they’ll use it to work out the risk of lending to you.

You’re able to view your credit score at any time on websites like Experian. It’s good practice to get in the habit of regularly reviewing your credit score because mistakes can affect your chances of borrowing further lines of credit. Common mistakes include debts that don’t belong to you or cleared debt still showing as unpaid.

Some funding methods, like credit cards, will adjust the cost of the finance based on the risk of lending to you, but a lease agreement is fixed based on a credit score of good or above.

If your credit score doesn’t meet this threshold, you might want to reconsider putting in an application because it can show on your report if you’re declined and worsen your score as a result.

Maintaining a healthy credit score is reasonably easy.

Make sure you’re paying off existing debts or credit regularly, always make payments on time, and stay in touch with your creditors if you run into any financial issues.

This will indicate you’re on top of your finances and therefore less of a risk.

Missed or delayed payments will result in a bad credit score. You can improve a bad credit score by repaying what you owe and continuing to make further payments on time.

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