Will Credit Scoring Ever Matter to me?

It can be easy to think that credit scoring is not something that is important to you and that you do not need to worry about it. However, it is important to have a good understanding of who might use your credit score and then you will be able to make a decision as to whether you should be looking after your credit score and making sure it looks good or whether it really does not matter.

Lenders

Most lenders will take a look at your credit record to see whether they think that they can trust you to repay the loan that you want to take out. They will look for evidence that you have repaid loans in the past and that you are capable of making the regular payments that are required when repaying most loans. You may feel you will not need a loan, but many people make use of credit cards and overdrafts and also use money to buy a home. Therefore, it could be very useful to have a decent credit score so that you can borrow when you need to. There are some lenders that will not be concerned with your credit history but what you can borrow form them is limited. Some only lend small amounts and others will need a guarantor if you want to borrow higher amounts. You will also find that they are more expensive than conventional lenders.

Insurers

Most people have insurance for various things, such as to cover items we own, cars, phones, houses, general possessions etc. With some insurance you have the option of paying monthly or annually. Paying annually tends to be cheaper but it can be more difficult to do as you will have to find a lump sum. Therefore, paying monthly could be easier for a lot of people but it will not be offered as an option to those people that the insurers do not feel they can trust to repay it. This may even mean that some people will not be able to take out insurance at all.

Utility Suppliers

Utility suppliers might insist that people who have a poor credit report have a pre payment meter fitted. This means that it is necessary to pay for electricity and gas in advance. This might not sound like a problem but it is because pre paying can be more expensive and these customers are often not offered the same deals as other customers.

Landlords

If you are looking to rent a property, you will find that the potential landlord will want to check to see whether you are capable of paying the rent. This means that they will want to see that you have been keeping on top of payments and repayments and that you do not have lots of loans which could indicate that you will be able to manage the rent. If you have lots of loans then they may worry that you will not have enough money left to pay the rent.

Employers

Some employers will look at your credit record. Most will only check it to check your ID but others will be interested in your credit record. For certain jobs you will be handling money and they will be wary of people that have a lot of debts as they might feel that they will be tempted to take some of the money they are handling. Obviously, they will realise that most people are not thieves and can be trusted but it could still be a factor that might put them off, particularly if there are a lot of applicants for the job and others have a good credit report.