Do You Need A Financial Health Check?

You can do most things online these days and checking your financial status is no different. There are many reasons why people might want to do this. In some cases, it could be because they are planning to apply for credit and want to see if they will get it. Other people might want to see whether their poor credit history is behind them. Still others may have applied for credit and been turned down.

Whatever the reasons, there's now an easy way to find out what your financial health is like. And it's free. You still have the option of paying a fee to get Experian or Equifax to post you a credit report, but in the meantime you can get a sneak preview of what you'll find.

Credit Scoring Questions

There are several websites that offer the free credit scoring service. Although the forms are slightly different on each one, the questions they ask are usually the same.

First of all they want to know your name, how old you are and whether you are married or single. Older, married people tend to score more highly. Then they will need address and postcode details. Just as with insurance, your postcode can affect your credit score. If you have lived at the same address for more than three years, that's good too. Home ownership also scores highly. This will add more points to your credit score. Tenants or people who are living with parents won't do as well on this question. It also helps to be on the electoral roll and to have a telephone.

Financial Data

Other questions on the form are designed to establish your financial health. They relate to your employment status (full-time, part-time, self-employed, retired, unemployed) and the time you have spent with your current employer.

Having a bank accounts is a big plus in credit scoring, especially if you have been with the same bank for a number of years. It's also useful to have a cheque account and a credit card.

Finally, you will have to say how good you are at paying your debts and whether you have had defaults or County Court Judgements (CCJs).

Credit Scoring Results

Once you submit the form, you get the results immediately. This consists of a point score between 1 and 1000 and may also include a star rating, with five stars being the best. Some websites offer credit products based on the score you get.

If you have a four or five star rating, then you are probably ok for most credit products. Whether you actually get them will depend on individual lenders' criteria.

If your rating is lower, there are steps you can take to improve your credit score. For example, you can boost your score by:

getting on the electoral roll. This should be at the same address you give when applying for credit
getting a bank account and staying with the bank for more than five years
trying to minimize the number of applications for credit
getting a credit card
making sure you make the required payments on time and in full

More Information:

Planning your Personal Finances
Budgeting is not exactly something that most people enjoy doing. It brings up connotations of cutting back, tightening the belt and making sacrifices. It need not be as drastic as this.
Credit Building Tactics
Much is written about credit ratings, the score against an individual’s name, that rates their eligibility for credit. This article discusses different methods that you can use to try and build a new, better credit rating.
Credit Reports
Every time a customer applies for a financial product such as a credit card, the credit company will consult that customer’s credit file. This file records all their financial activity in terms of credit applications and banking activity.
Using Your Credit Card To Build Credit History
Let’s say you want to buy a house, but you need to get a mortgage to help pay for the house. However, you have no credit history to speak of, so how can you apply for the mortgage to get your dream home?

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