A good credit rating can make you a more ‘attractive’ customer, giving you access to better deals such as lower interest rates. Vice versa, bad credit scores can affect your ability to take out certain financial products such as a mortgage and credit cards.
Lenders will rate you upon factors contained in your credit file when deciding whether to accept your application, with criteria varying between different lenders:
This information is collected and assessed by a number of credit reference agencies, which is then checked by lenders on application for credit.
When applying for a loan or any type of financial product the lending company will also rate you upon other factors that may be included as questions on their application form, such as your salary and the number of children you have, plus any previous dealings you may have had with that particular company.
This means a credit report can only give you an indication of your likelihood of being accepted for a particular deal. In the UK there is no such thing as a definitive credit score.