Credit Score Advice

Commercial vehicles are vital to your business – that means your credit score is too; look after your credit and it will look after you. Credit is an important factor to consider when applying for finance, a good credit score gives you a good chance of having your application accepted!​

What is it?

Your credit score is the value that determines the risk that a finance lender will incur when loaning money to you. It’s used by lenders to decide whether to allow a person access to credit - the lower your credit score, the higher the risk to the lender (because you may have trouble making repayments).

Different credit score agencies have different maximum and minimum credit scores depending on who is used, and they have different criteria to affect your score either positively or negatively.

It’s a minefield!

Read on for our advice, hints, and tips on how to make the most of your credit score.

What will affect it?

• Short credit history
  • Seems unfair, but generally younger people have shorter credit history, and this can affect your score, too. Essentially the longer your credit history, the more reliable it is to measure by a credit score agency.
• Missing payments
  • This can be really damaging to your score – missed credit payments will all be recorded and drag your score down because it suggests you might not be able to make repayments in the future.
• Using too much credit.
  • If you have several accounts approaching maximum credit use for extended periods of time, this will reflect poorly on your score. Again, this is suggesting that you aren’t managing your repayments properly which looks risky to lenders.
• Not having enough variety
  • Having more than one credit account and using an array of them can make you appear to be in control of your finances, using only one kind gives the impression of inexperience, implying a risk to a lender.
• Too many credit applications
  • Having several new credit accounts open or making credit enquiries in a short space of time will reflect poorly on your score. It is possible to check your credit score without damaging it, however.

How do you make it better?

Even if you find yourself with a poor credit score, there are steps you can take to get it back on track, by avoiding the pitfalls listed above and putting in a bit of work to drive your credit score back up to a healthier one.

• Consistency.
  • Carrying out regular checks and making sure you’re in a good position to apply for credit can be the first step in not causing more damage when you do. Using the same address and personal details for all credit accounts stands you in better stead for a better score. Registering to vote if you haven’t already will help, too.
• Consolidation.
  • Don’t submit too many credit applications. If you have unused credit cards or accounts, cancel, and close them, and try to use only 50% or less of your credit limit for the ones you are using.
• Care
  • Never use your credit card to withdraw cash from an ATM, this is expensive and will damage your score as it implies poor money management. Do your research - using a credit card that can help to rebuild a poor credit score is definitely worth consideration.