Why is your credit score so important?
16 June, 2023A credit score will affect every aspect of your financial life. It makes it easier to achieve important milestones, like renting somewhere to live, buying a car, or getting a mortgage for your first home.
What is a good credit score?
A good credit score in Ireland is high; it means that you are a low risk to lenders and are highly likely to repay on time.
A bad credit score in Ireland is a low one, meaning that you are a high risk to creditors and are highly likely not to repay credit on time.
Factors that make up your credit score
- Payment history: Do you pay your bills on time?
- Amounts owed: What is the total amount of credit and loans you have compared to your total credit limit?
- Length of credit history: How long have you had credit?
- New credit: How often do you apply for and open new accounts?
- Credit mix: Having a variety of installment loans and revolving credit accounts, including credit cards, auto loans, mortgages, and personal loans
Boost your credit rating today:
- Check your credit report often: ensure it has no mistakes and all new payments are correct.
- Report errors to your lender: your report can be updated if an error is deemed correct.
- Clear arrears: and ensure all future payments are correct and on time.
- Reduce your outstanding credit: if your debt-to-income ratio is high, try reducing your debt before applying for more credit.
- Minimise credit checks by lenders: do your research and find out their lending criteria – too many checks may negatively affect your credit rating.
Have you checked your credit report?
You should check your credit history, mainly before you apply for credit. You’ll be credit checked if you plan to: take out a loan, get a credit card, apply for a mortgage, etc.
How do you get your credit report?
You can check your credit record for free on the Central Credit Register website.
To apply for your credit report, you’ll need to complete an application form and provide three types of identification:
Documents you need are:
- photo with signature, such as a passport or driving licence
- recent proof of your address
- proof of your PPSN
https://switcher.ie/guides/how-to-check-your-credit-record/
Click here if you’d like further information about the Central Credit Register
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