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6 Charts To Help You Understand Your Credit Score

Knowing your credit score is the first step toward controlling your credit score. CreditWise is a new tool from Capital One that gives you free access to your credit score and helps you understand the factors that affect it. Find out more.

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Your credit score is a measure that lenders use to determine how risky you might be to lend money to. We’ve created six charts below to help you understand the ins and outs of your credit score. Read on and learn!

1. There are three major credit reference agencies in the UK.

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It’s important to check that the information held at each agency is correct, because different lenders use information from different agencies. Incorrect information could result in your credit score being affected and your ability to borrow impacted, so it’s worth taking a look.

2. Your credit score may differ across credit reference agencies.

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You can be sure of one thing though: A higher score is a stronger score, no matter which agency you use.

3. A number of factors determine your credit score.

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Together, they create a picture of your financial health. Each factor tells a lender something different about your financial behaviour so they can assess how much of a risk you might be to lend money to.

4. If your credit score isn’t what you want it to be, small steps can help to improve it.

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Building a healthy credit score isn’t done overnight. The good news is you can improve your score by taking small steps such as setting up direct debits so you always pay bills on time, registering for the electoral roll and paying off any credit balances each month.

5. A longer credit history can also contribute toward a stronger credit score – as long as you've been using any available credit that you have responsibly.

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Building a credit history involves using your credit to make purchases and paying off the balance (in full, if possible) on time each month. Adopting this habit over a long period will build a credit history. If you haven’t been using your credit responsibly, this will show regardless of the length of your credit history.

6. Monitoring your credit score is one step towards looking after your financial health and getting access to the financial opportunities you want in your life.

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As an additional benefit, monitoring your score will help you remain vigilant against identity theft. Fraudsters may try to apply for credit cards in your name, which could damage your credit score. But you won’t notice immediately unless you’re monitoring your score!

Ready to take control of your financial health and start owning your credit score? CreditWise is a new tool from Capital One that gives you free access to your credit score and helps you understand the factors that affect it. Find out more.