What is a credit score?
A credit score is a numerical calculation based on the information in your credit report. Your credit score is used by lenders to determine your creditworthiness. Your score will go up or down based on your payment history, account balances, new inquiries and a number of other factors.
What is a credit report?
A credit report is a statement that contains information about your credit activity and current credit situation e.g paying a loan history and the status of your credit accounts
What does credit history mean?
Your credit history is a record of how you repay your debts over a period of time. This is used to judge the risk of lending money to you.
What does CRA mean?
CRA is an abbreviation of Credit Referencing Agency. There are 3 main bureaus in the UK:
They receive information about individuals and businesses - both public and credit related. This information is provided to lenders, landlords and employers upon request to help verify and ID you, and in the case of lending, it will help them determine whether and under what terms, they will lend someone money.
A CCJ is an abbreviation for County Court Judgment.
If you fail to make repayments, lenders can try reclaiming the money owed via the county court. A judge issues a CCJ setting out the terms in which you have to pay back the money. A CCJ can stay on your credit report for up to six years.
Credit is an agreement where you borrow money to obtain goods or services now, with the promise to repay in the future. A credit agreement usually includes an interest charge
Refers to your ability to pay back what you have borrowed Someone who is deemed creditworthy is someone the lender believes is willing and able to pay back loan payments on the agreed terms
A tool to help you understand the impact of the changes you make to your credit score. Both positive and negative
FHI (Financial Health Indicator)
As part of the Canopy Premium subscription you get Financial Health Indicator (FHI). This works together with your credit score. Your credit score looks at your past, your FHI score provides you an insight into your future to help build a true picture of the state of your finances.
A credit rating is a system that organisations can use to decide how likely it is that an individual or business will be given credit by a lender. A credit rating can be a number or a series of letters or another system. Each lender will have their own way of judging whether to offer an individual credit or not.
Credit fraud is when someone else uses someone else's personal credentials and credit standing to borrow money or use credit cards to purchase goods or services. With no intention of repaying the debt. The most common type of credit fraud is credit card fraud.
This enables you to report your rent payments to CRAs to help boost your credit history and score.
A safe and secure way to share your financial information with companies.
Open Banking was introduced across the UK in January - 2018 It’s an industry-wide initiative, designed to let you take control of your data and share it with organisations in a secure way. It’s simple, secure, fast and convenient.
Credit utilisation is the percentage of your total available credit that you are currently using. For example, if you have a credit limit of £1,000 on a credit card, and you spend £500 during the month, you will have used 50% of the £1,000 available to you. This means your credit utilisation ratio would be 50%. Most CRAs (credit Referencing Agencies)would say a credit utilisation rate of 30% is a strategy to go for. Anything over 75% is likely to cause red flags! You can see how much credit you’ve used in your Canopy account.
The electoral register also called the ‘electoral roll’ lists the names and addresses of everyone who’s registered to vote.
This provides you with insights into what you’re doing well and what can be improved. To help you understand how you can improve your credit score
Hard Credit Check/Searches
A hard credit check or search is when a company does a complete check on your credit report. A hard check is recorded on your credit report. And is typically done when you apply for any type of credit e.g. Credit card, loan, mortgage. This is so the lender can check your suitability. But be aware other organisations also conduct hard credit searches too. For example mobile phone providers and utility companies.
Soft Credit Check/searches
A Soft credit search is a quick look at your credit report. Providing high-level insights. A lender may want a top-level view of your financial history so they can pre-approve any offers, or show you what you could potentially be eligible for. The important thing to remember is that soft searches are not visible to companies – so they have no impact on your credit score or any future credit applications you might make. Only you can see them on your report and it doesn’t matter how many there are.