Why Is Your Credit Score Important?

Matt | Personal Finance

Are you looking to boost your credit rating and get closer to that perfect score?   In this Short, I cover why having a good credit score makes it easier to get the best possible interest rates and terms for mortgages, loans, credit cards, and more   #creditscore #credit #creditrating #loans #mortgages #debt #debtfree

Transcript

00:00A credit score is a sign of how healthy your credit report is and lenders will use it to

00:05check whether you're a reliable borrower. It can impact whether you get accepted for loans,

00:10mortgages and credit cards. Most of the top credit reference agencies, Equifax, Experian

00:15and TransUnion have four or five categories for credit scores ranging from excellent to poor.

00:22Each credit reference agency uses a different numerical scale to determine your credit score.

00:26However, you'll probably fall into one category with all of the agencies

00:30since they all base your score on your financial history. Experian scores range from 0 to 999

00:37with categories very poor and poor below a score of 720. A credit score between 721 and 880 is

00:46considered fair. A score of 881 to 960 is considered good and a score of 961 to 999 is considered excellent.

00:56So why is your credit score important? Your credit score plays a role in determining the

01:01interest rate and payment terms on mortgages and loans, and lenders will base the interest

01:06rate they charge on how risky they view as a borrower. So while it may be possible to get a

01:11mortgage with bad debt, you're typically better off improving your score before you apply for a

01:16mortgage to qualify for good terms. This could save you thousands of pounds over the lifetime of the loan.

01:22Thanks a lot.

01:25Bye!

01:27you

01:29you

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