We all know how important our credit ratings are – from getting a new phone contract to getting onto the property ladder, our credit score will certainly be considered by the lender.
But, despite the fact that they consist of our own personal financial details, it can be frustratingly difficult to look into our own credit reports and really see what the lenders see.
Although it’s your legal right to request a copy of your statutory credit report from companies such as Equifax, for the nominal fee of £2, getting your hands on it doesn’t necessarily mean that you’ll be able to determine how lenders will assess your risk.
When deciding whether to accept an application for credit, lenders will consider a wealth of different factors – and what one company sees as an innocuous detail, another might see as a risk.
This can be a big problem. It’s increasingly important for customers to build their score with responsible use of products like credit cards if they want to be considered for bigger loans in the future.
However, if the application for a card is declined then that puts a black mark against your score… which in turn makes it even harder to secure credit if you apply again. Taken all together, this can begin to feel like a catch-22 situation.
Check your score – and get insider insights
Luckily, there are some companies out there that will help you to understand your credit rating in relation to specific financial products that you might be interested in. One such option is Money Saving Expert’s Credit Club.
Run by respected financial expert Martin Lewis, the Money Saving Expert has become a credible source of financial information for many, giving in depth information to help people take control of their finances.
The Credit Club is a natural extension of this and, alongside giving you free access to a credit report from Experian, you also get analysis of what this report really means. That includes:
- A ‘hit rate’, indicating how likely it is that your application for various financial products would be accepted.
- An affordability score, outlining how well you could actually afford to pay for loans and credit cards. This is important because, even if you are accepted for a credit card or loan, you should carefully consider how you’ll afford to pay it back before going ahead.
- Product eligibility for specific loans and cards. This will be the most exciting element for many consumers. By using a ‘soft search’, the Credit Club lets you see whether you’ll be accepted for cards or loans without leaving a mark on your credit report. In some cases, it can even give you a 100% guarantee that your application will be accepted.
As Martin Lewis says, “A credit score alone isn’t enough – what counts in the real world is, will you be accepted?”. While the Credit Club is still in beta at the moment, it already seems like an excellent tool for determining exactly that.
Whether Money Saving Expert’s Credit Club sounds useful to you or not, we strongly recommend taking the time to delve into your credit score and take back control!
