If you're a busy working parent, chances are you'll have plenty to juggle with already – the business, kids, plus trying to squeeze in a social life – and the last thing you'll want to worry about is your credit score.
But whether we are aware of it or not, our credit score could at one point have a big impact on our lives, and can be a deciding factor on whether a lender will choose to offer you credit – be it for a loan, bank account or mortgage. After all, no lender is obliged to grant you credit, especially if there is a high risk of you being unable to pay it back.
What is a credit score?
Your credit score is calculated from many different factors which vary from lender to lender – it could even be adjusted depending on the type of credit you apply for. The credit scoring system predicts any risk involved in giving you credit, and is designed to help lenders make a more informed and responsible decision.
A credit score can range anywhere from 0 to 999 and is usually generated from your credit report along with any additional information on your application form. Credit scores may vary depending on how the lender has calculated it.
What if you have a bad credit score?
There are many reasons you could have a bad credit score, from outstanding debts and multiple credit card applications, all the way to simple administrative error. Many people can have a bad credit score without even being aware of it, until they are turned down for credit when they need it. In order to keep a check on your credit score, experts recommend monitoring your credit report around once a year.
Why should you check your credit score?
Checking your credit report and credit score will allow you to become aware of any changes in your credit report early, giving you the opportunity to take action against it (if necessary) before it can cause you any problems. It can also help you spot any fraudulent or suspicious activity being carried out in your name, which can also affect your credit score.
You have a right to dispute any inaccuracies on your credit file, and resolve any errors which can occur. This BBC article explains more about how a bad credit rating can affect you and what you can do to remedy it.
How to check your credit score
If you're worried about any recent debts or financial struggles you've been having (for instance, difficulty with paying your mortgage or loan repayments) and how this could affect your credit score, it's best to monitor your score using a credit reference agency such as Experian.
Experian CreditExpert offer a 30 day trial as part of their online credit checking and Identity Fraud Expenses Insurance service, giving you unlimited access to your Experian credit report and credit score. At last, some peace of mind to let you focus on the important things in life.