How do credit scores work?

BKR1888

Hi, I'm new here but I have question about credit scores. Now an excellent credit score is considered to be around 700-800 (don't worry I know I'm not getting that over night 😊) so surely having no credit history at all means you must start at 0. Maybe I'm being dumb but bare with me as I'm about to start climbing that ladder and want to know what's up. So technically no credit history means 0 credit score so does that mean to work my way up I need to go through bad, fair and good credit scores to reach a excellent score or am I always excellent if I use it correctly and pay off debts very fast. Any help with this is greatly appreciated as I'm not sure how it works.

[Deleted User]

The score means nothing and can be ignored. Credit history is what matters.

BKR1888

Thanks for replying so quickly. So basically as long as I use credit correctly and pay everything off well and in good time I'll have good credit history and the score will be high as a bi-product? Don't banks and finance companies like to see a high score though?

[Deleted User]

Lenders can't even see your score.

MEM62

Credit scores are randomly made up by CRA's. The then use these as a tool to sell you their subscription services so that you can 'use' your credit score when making financial decisions.
The scores are neither seen or used by lenders or other financial institutions who each have their own criteria for making lending decisions. The only important factor on your credit report is your history.
Run you finances sensibly and you should have few issues.

DCFC79

BKR1888 wrote: »

Thanks for replying so quickly. So basically as long as I use credit correctly and pay everything off well and in good time I'll have good credit history and the score will be high as a bi-product? Don't banks and finance companies like to see a high score though?

I cant stress enough the scores don't mean squat. Lenders will use an in house system to score you based on the information you provide in the application (just an example but if your history is littered with pay day loans it might put some lenders off) as well as whats on your credit history.

Maybe have a read of this thread https://forums.moneysavingexpert.com/discussion/4974939

Consumerist

BKR1888 wrote: »

. . . So basically as long as I use credit correctly and pay everything off well and in good time I'll have good credit history and the score will be high as a bi-product? . . .

That's more or less the way to go about it and :-

1. Make sure you are on the electoral roll at your present address
2. Give them a land-line contact number and not a mobile
3. Don't change address too often
4. Don't withdraw cash on a credit card (a sign of financial stress)
5. Don't take out pay-day loans (another sign of financial stress)