Martin Lewis launches new credit score tool that helps you get accepted for cards and loans
MARTIN LEWIS’ MoneySavingExpert has launched a new tool which reveals how likely you are to be accepted for credit.
The consumer champion website unveiled the “Credit Eligibility Rating” tool in its latest newsletter.
It combines three features that will inform whether you are likely to be accepted for a new credit card, loan, or other form of credit.
The tool lets users find out their credit score via data from TransUnion, one of the big three consumer credit reference agencies.
They can also get their affordability score – this factors in your income which credit scores don’t.
Third, you can also use the tool to see how your credit eligibility rating changes over time.
There’s also a mortgage affordability calculator which tells you how much you might be able to borrow on a home loan.
The advantage of the tool is that it combines multiple factors which affect whether you are offered credit.
This means you’ll get a more accurate prediction as to whether you’ll be offered credit from lenders.
You can access the new tool via the MSE app which can be downloaded for free off the Apple App Store or Google Play.
One user of the new tool recently emailed in to MSE to reveal how it had been useful to them.
They said: “The MSE score [Eligibility Rating] helps put in practice the credit score: what I am likely to be eligible for if I were to apply.
“The TransUnion credit score is helpful, but is abstract: here one can see what one is likely to be accepted for, which is obviously essential.”
What is a credit score?
Your credit score is financial information used by lenders that informs them whether they should offer you a mortgage, loan, credit card or other form of credit.
There are three main credit reference agencies that compile your score: Experian, Equifax and TransUnion.
They pull together information from your financial history and how good you have been at repaying any credit borrowed.
Your three credit scores
EVERYONE has separate credit scores with each of the three credit reference agencies - Experian, Equifax and TransUnion.
Each holds different information about you, including details of credit, mortgages, county court judgements and individual voluntary arrangements.
The CRAs provide customers with three discrete credit scores, but lenders don’t use these, according to Sara Williams, founder of Debtcamel.co.uk.
Lenders check your credit file instead, but they don’t tell you which agency they use.
A bad score is a sign that you are likely to have trouble with credit applications.
Visit checkmyfile.com to see your Experian, TransUnion and Equifax reports in one place.
Each of the three credit reference agencies has its own points system to base your score on.
Ratings usually range from poor to good, very good or excellent.
Having a good credit score is important if you’re looking to take out a loan, mortgage or credit card.
Lenders use any data collected to decide whether they feel comfortable lending to you.
They also use your score to decide how much interest they will charge you over the course of the loan.
How to boost your credit score
There are a few things you can do to boost your credit score – and some take just minutes.
Register to vote
Registering to vote is one quick way of boosting your score – you can do this if you are an English or British citizen.
If you live in England and Northern Ireland, you must be 16 or over to register to vote.
If you live in Scotland or Wales, the same rules as above apply, except you can register to vote from the age of 14.
You can register to vote via the Government’s website.
Limit credit applications
Taking out several applications for credit at one time can negatively impact your score.
That’s because applying for multiple deals can make it look like you are financially desperate.
Rather than applying for a number of deals, use a comparison site to shop around for the best deal suited to you.
Don’t do this, and you are likely to be hit with a “hard” search footprint which can dent your score.
Reduce existing card balances
Keeping an eye on your credit card balances can also increase your score.
You want to make sure you aren’t too close to your credit limit. For example, if you were £800 into a £1,000 limit that would be too high.
Lower balances tend to show lenders you need credit, but aren’t overly reliant on it.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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