Although initially created to help businesses decide where to issue finance, credit checks have become integral to background screening when applying for jobs. They are also used for many other aspects of life, including buying a house or vehicle. As such, it is of the utmost importance that credit scores are maintained.
The following is an overview of why it’s essential to keep a credit score in good standing, as well as some measures that people can take to improve a credit score.
A Poor Credit Score Can Mean a Job Offer is Refused
Although a poor credit score doesn’t necessarily mean a person will be refused a role, there can be instances when this is the case. Some credit checks are carried out to verify a person’s identity, whereas others are used to assess the financial background of a job applicant.
Those applying for jobs where they are responsible for finances may be expected to have a good credit record. Defaults, missed payments, and CCJs present on a credit file could mean that people find it harder to secure a job role.
Low Credit Scores Could Mean Finding Accommodation is Problematic
A good credit score can make all the difference when applying for a mortgage, but this isn’t the only situation where finding accommodation is connected to background screening. Landlords also use credit checks when assessing the suitability of the tenant.
Landlords will not always refuse a lease when met with a poor credit score, but there could be a requirement to pay rent in advance.
Adverse Credit Can Make It Difficult to Open a Bank Account
Although a credit application isn’t part of all bank accounts, there can still be instances when a low score can mean a person cannot open a personal or business account. There will often be options available, but these can be more expensive. As such, those struggling to open a bank account should try to improve their credit score as soon as possible.
What Can Be Done to Increase a Credit Score?
Dealing with unpaid debt won’t instantly remove CCJS and defaults, but it is a good start when improving your credit score.
For some, it can seem that a credit score will never improve, and it can take as long as six years for a credit record to fully recover. However, the sooner steps are taken, the sooner a credit score will improve.
The following is an overview of some of the steps people can take to improve their credit scores.
- Make payments on time.
- Update electoral roll information.
- Check credit reports for any errors.
- Don’t make numerous credit applications.
- Avoid payday loans.
In addition to making payments on time and maintaining debt in a positive way, it is advisable for people to review their credit file regularly.