Need to borrow for Christmas? Sort your credit score now for cheaper interest deals
One in five British households are already worrying about festive expenses and nearly a quarter say they will need to take out a new financial product such as a credit card to help manage the cost of Christmas.
While consumers are being savvy by visiting price comparison sites before applying for a new card, research from Clearscore reveals that only one in five will check their credit score and worryingly, 30% have never checked their credit score.
Your credit score is vitally important as it gives lenders an indication of how creditworthy you are and a poor score can affect your ability to get the best financial products.
Clearscore calculates the difference between a ‘low’ and ‘excellent’ score could mean £20,000 in extra interest repayments across a lifetime – nearly the equivalent of a year’s annual take-home salary.
However, despite its importance, 44% don’t realise their credit score affects their chances of being accepted for a credit card and less than half (42%) know the interest rate they’re offered is also impacted by their financial history.
Brits don’t check their credit report because they don’t want to pay to access their data – 34% cited this as the main reason.
Justin Basini, CEO of ClearScore, said: “For many people, Christmas inevitably involves some level of short-term borrowing as a way to spread the costs, often using a credit card. The important thing is to keep that borrowing under control and pay as little in interest as possible. Lenders reserve the lowest rates for those with better credit scores, so it pays to start improving yours now.”
How to improve your credit score:
By actively managing your credit score, you will be giving yourself a chance to access the best products on the market. Here are ClearScore’s top tips for improving your score and saving yourself a tidy fortune, but see YourMoney.com’s Ten ways to boost your credit score for more ways: