Credit scores and credit reports explained (UK)

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I get a lot of questions about credit scores and credit reports, so in this video I'll take you through the basics - exactly what they are, why they are different and when they matter.
W A T C H N E X T
How to check your credit report for free
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Can bank switching hurt my credit score
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#CreditReportUK #creditscoreUK #creditrating
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T W I T T E R - / andyclevercash
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A B O U T A N D Y
Andy Webb is a money blogger and journalist. He runs the award-winning website Be Clever With Your Cash, hosts the Cash Chats podcast, presented Channel 5’s Shop Smart Save Money and writes every month for Reader's Digest. Andy also founded the community ukmoneybloggers.com.
DISCLAIMER
Content in these videos does not constitute regulated financial advice. Any offers mentioned were correct at the time of filming.

Опубликовано:

17 май 2021

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Комментарии : 48

@viktoriatoth5809 11 месяцев назад

As a foreigner living in the UK for a decade now I still can't wrap my head around this whole credit score thing. I'm 51 so definitely not a child, stable job, stable income, stable family life. Bought a car taking out a loan, never missed a payment in these 10 years living in the UK, not even during Covid, not for the loan or any bills or rent. And still my credit score doesn't move from 610 out of 1000. Everybody says oh you need to take out a credit card, do this, do that... I don't get it. Why do I need to get myself into debt to prove I'm a good customer? Because credit card is basically that. I would spend money I don't actually have. I don't need it, I can pay for my expenses on my own and if I can't, I was taught by my parents to save money for things I want and that's what I'm doing. I save money for new furniture, I save money for our holidays, spending only as much as I can afford. But according to the British system being responsible is not the right way to go, you can only prove how responsible you are if you go into debt and pay them on time. Weird system...

@yanekvanharen3682 11 месяцев назад

yeah i want an answer to this question.. i have credit cards and phone contracts on my account and theyre all getting paid but each month the score doesnt increase so whats the point?

@oyeniyijanet9986 5 месяцев назад

I had the same conversation with my friend this morning, it is really annoying how a debtor you must become to show you are a good customer...😮

@Mxj481 3 месяца назад

Also as a foreigner living in the UK, I too find this to be a weird system. Although when I moved here, I was too young to even know or care about credit scores. The whole point is to be able to prove that if you do decide to borrow money, you can be trusted to pay it back. It’s a weird system, I agree, but if you want your score to improve you should probably play the game. You say you can pay for your expenses on your own - great! If you were to get a credit card, you could then move some/as much of your expenses onto it, only buy what you need and/or can afford (which you already do), and pay off your credit card in full each month so you don’t pay any interest. That way, you can build credit here in the UK, and some credit cards even give you really good benefits and rewards. Some do have a yearly cost yes, but they can be very much worth it. Again, silly system I agree, but it’s not that hard to play the game. Credit cards aren’t necessarily evil if you treat them as a tool to build credit and earn rewards, and not as ‘free money’.

@viktoriatoth5809 3 месяца назад

@@Mxj481 I understand what you are saying but that still doesn't change the fact that the system is trying to force you to borrow money, even if you don't need it, just to show that you are financially stable. Isn't it better proof that I am able to pay for my expenses and for years haven't had a single late payment, neither in my bills or paying back my loan for the car? In my opinion this is a much better indicator than a constantly paid back credit card balance... It's a totally possible scenario that somebody looses control of their finances, runs out of money before payday, uses the credit card, and than puts the money back when they get paid, just to repeat the cycle every month. They will have a high credit score and you will never even know they struggle with money...

@ben_______123abc 2 месяца назад

You most likely already do this but simply the act of putting your self down to vote against the place you live helps

@SiGr10614 3 года назад

thank you so much for covering this topic andy!! much appreciated.

@BeCleverWithYourCash 3 года назад

Glad it was helpful!

@idreeskhan8885 2 года назад

According to Clear Score I have a credit score of 325 out of 1000. Im a student. I have no debts and have no missed any payments. It recommends that I get a credit card but no major bank will offer me one. In fact for some strange reason I cant even open a current account with another bank.- What the hell is this level of control? It also recommends that I get on the electoral roll- But why should I if I have no intention of voting and I dont want people to be able to able to know where I live as Electoral roll allows this. I also have no need for a credit card and no major bank will offer me one, so again it feels like I am being punished for no reason, and being forced to open get on the electoral roll and get a credit card.

@victoriab8186 Год назад

The electoral roll is a major factor in IDing you for credit, but there are two versions of it - the 'open' register, which allows companies etc. to buy your details and see where you live, or the 'full' register, which can be used to vote, and be checked by banks for credit/ID checks. I'd suggest if you don't want just anyone to find out where you live, but you need more information for the banks before they'll give you an account, you get on the electoral roll, but opt out of the 'open' register.

@crapbag426 8 месяцев назад

You have to build credit, it’s not given to unless you apply for things. Companies want to see that you are good with paying off debt/ bills on time. This is why the score is low. You haven’t built it up. I was in the same situation, my score was 500 , had 3 CCJs and the rest. I built it up to excellent. It’s now 978

@thechosenone3465 3 года назад

Thanks for the very informative videos !

@BeCleverWithYourCash 3 года назад

Glad you like them!

@FVHModified 3 года назад

Thanks .. nice explanation 👍

@BeCleverWithYourCash 3 года назад

Glad you liked it

@tinad721 3 года назад

Thanks Andy. Would you kindly do a video on mortgage (not first time buyers). This video really is helpful towards mortgages too.

@BeCleverWithYourCash 3 года назад

Hi Tina. Have you seen this one on remortgaging and LTV? ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-NL9qYUlxuA4.html

@payambagheri6370 2 месяца назад

thanks a lot . I am trying to open a business account in the UK and they want to conduct Credit Reference Fraud Prevention checks .... I was not sure what they were .

@gaurav_vibes1152 2 года назад

Does your credit score and credit reports gets carried if u want to permanently move to uk from canada?

@lynnemalcomson5931 6 месяцев назад

Hey! I have 2 questions 1) How do I add in rent payments to enhance credit score? I transfer to a landlord monthly 2) I have lived in multiple addresses and this flagged up on mine - what should I do when I change address to avoid any problems? They are updated with my banks any time I move! Thank you!

@charliestewart8620 10 дней назад

I have a loan a mortgage and a few credit card balances. My score is excellent ATM . If my score was dropped to poor would this affect my current credit balances mortgage etc used or just future credit I apply for ? Tia.

@sallyaber1967 Год назад

I had situation a bit strange to me. Please advise if you can, I have relocated to uk in December 2022. Started my job in mid February 2023. Paying rent ( no direct debit) , tax and gym paid direct debit and in time. Also made some saving untill now (May). Register for a year at the address, registered at election. In April got credit card onecapital. Before that i got this card my score for 839. In May my credit score turned to 639. Why it could happen? I have used credit card about 60% of limit. But its not paid yet, it would be withdrawn on 10th june. I have set up the direc frbet for full amount to be withdrawn to pay credit card.

@yogiparashara4016 3 месяца назад

My challenge is I have a very high credit score but I’ve recently been refused credit from Barclays Partner Finance ?? And I can’t see why, can you help ?

@Refertoneee 2 года назад

Hi there 2 questions Are all the interests on credit cards have the same rules ? If I just pay the minimum amount every month do I still pay interest ? Because I think that some card they charge your interest after 1 year Thanks !

@BeCleverWithYourCash 2 года назад

Hi Makiroll, the interest rate will vary on every card. So if you think you're have to pay some of it then it's important to go for a low rate. Unless you have a 0% purchase credit card, you will pay the interest on any balance that is left each month. The minimum repayment means you don't get charged fees or missing a month

@alial-isawi8590 2 года назад

Who makes the credit report? I don’t get it

@ryancollins5917 3 месяца назад

How do they check you out is it your bank account or is it your name and address

@harshshah3282 Год назад

Do the credit card lenders look into all hard searches as one: like both current account and credit card searches? or do they just account for the credit searches?

@crapbag426 8 месяцев назад

Yes your current accounts, loans ,

@s34ncl71 3 года назад

Thanks Andy, just wondering by what percentage credit card utilisation has to be reduced before impacting on your score? i.e. if at 90%, would reducing to 80% or 70% make a difference, or would you have to reduce to 60% or 50% to increase your score? Thanks

@BeCleverWithYourCash 3 года назад

So Experian say that 25% per card is a good thing to aim for. I'd imagine that the closer you get to it the better it will reflect on your report.

@likhan.ghosh. 3 года назад

Any update on Chase current account in the UK….. Been holding out on any switches

@BeCleverWithYourCash 3 года назад

Nothing yet!

@MichaelSpedding 3 месяца назад

The whole system is difficult to understand, ambiguous and lenders are not specific when they decline you for credit. For example, if I have a credit score of 899 out of 1000 (which would reflect an excellent report) and am declined - I have no idea why so cannot address the issue. When you have very specific questions regarding this issue or any other issues the information provided is generic and non specific. Reform it and make it a universal score with one central agency with criteria that is easy to understand, manage and rectify issues - or do the government want to complicate personal finance beyond belief so people are not able to take control of their finances and be in constant debt?

@andreweyes7180 3 года назад

Great video. Ty. What sort of credit score/report is required for AMEX?

@andreweyes7180 3 года назад

@@Equinox4523 I am thinking about getting one but not sure if any good.

@andreweyes7180 3 года назад

@@Equinox4523 as in being accepted in most places and ongoing cashback

@BeCleverWithYourCash 3 года назад

Hi Andrew. As Gary has already commented its all down to individuals. So go via a credit eligibility checker to see how you fit.

@jomonmathew7135 2 года назад

Hi Andy. Am a person of foreign national and I relocated to UK four months ago and I tried to get my credit scores using different platforms but due to the less information they have about me am not able to see my score/ report. Kindly can u share your knowledge regarding this issue. Hope so you will revert. Thank you.

@marikapietsch4835 Год назад

@andy same question here though I've lived in the uk for 8 years now but never took a loan or has debt here...would love to hear how to built up a good credit score.