Most of you know that I have been in and out of debt since the age of 18. I have been in full-time employment for nearly 10 years now which is a blessing when you constantly carry a balance on a credit card. I have been diligently paying my creditors, but taking a couple of months off in between jobs or a year off to go travelling was never an option. I guess 10 years of living from paycheck to paycheck and having no savings of any kind has finally got too much for me. It’s about time!
I will hopefully have my credit card (outstanding balance to date £2,395 at 0% APR) paid off in a couple of months’ time, which will leave me with my personal loan of roughly £8,000 to pay off. I am currently paying an extortionate interest rate on my loan of 15,9% APR and frankly speaking, I do not enjoy throwing away around £115 in interest charges every month! That’s around £3.70 each day! The end date on my current loan agreement is November 2017.
My plan is to (a) renegotiate my interest rate with my current bank or consolidate my existing loan by taking out a loan with a much lower interest rate from a different bank and (b) reduce the term of my loan. Since this is something I am planning to do fairly soon, I decided it was time to check what my credit score was. I am sure you all know what a credit score is, but if not, a credit score is a number usually between 0 and 999 (depending on a credit reference agency you are using) that reflects your financial history that lenders use to decide if you can afford to manage any new borrowings. I took advantage of a free 30-day trial and signed up with Experian to gain access to my credit report and my credit score.
Experian uses a scale of 0 to 999 to score you and the higher your score is the better chance you stand at getting any new credit. My current credit score is 908 which is a good credit score. I will be honest and say that when I saw the number I got a bit upset. 908? Is this all? I am not sure I am happy with a “good” credit score; I want it to be “excellent”!
I have looked through my credit report and found no significant errors. Overall, my credit score is high enough to get approved for new credit and qualify for a variety of competitive credit offers as most lenders view my score as low risk. Thank God for that!
As a side note, there are three main credit reference agencies and they have different scoring systems in place. I have decided to check my credit score again in a couple of months’ time, but use Equifax instead (I used my free trial with them less than 12 months ago which means I am not eligible for another free trial before December this year, I think). I don’t think I want to pay to find out my credit score as I can use Noddle for free for as long as I like to get an idea of what my credit score is.