Credit score

Keywords

credit score

What is a credit score?

A credit score is a number that gives an idea of how likely you are to repay any money you borrow, based on your credit history.

Credit reference agencies use factors like debt levels and repayment behaviour to calculate your score, and a higher score could mean you're more likely to be accepted for credit.

Lenders use credit scores to assess the risk of giving you credit, which can influence your chance of getting approved for credit (loans, credit cards, etc.) and even determine the terms of your agreements.

Related Jargon

What is an HPI check and do I need one when buying a used car?

An HPI check – which stands for Hire Purchase Investigation – is an in-depth look at the vehicle’s history, designed to uncover anything that a buyer needs to know.

How does buying a car using hire purchase work?

Hire purchase is a way of financing a new or used car and usually involves you putting down a deposit and then paying off the rest of the cost of the car in monthly instalments.

What is Personal Contract Hire (PCH)?

Personal Contract Hire (PCH) is a car leasing agreement in which you pay a fixed monthly price to drive a vehicle for an agreed term and mileage limit without owning it.

How does a PCP (Personal Contract Purchase) work when buying a car?

Personal Contract Purchase (PCP) is a way of financing the purchase of a car, with repayments covering the amount of money that the vehicle is expected to lose over the length of the agreement (usually three years).

What is meant by the depreciation of a car?

Depreciation is the difference between the value of a car when you buy it and what it's worth when you come to sell it.

What does a black box do in a car?

A black box is a small GPS unit in a car that sends information to your insurance company, so that you can potentially pay lower premiums.

What is benefit-in-kind (BIK) tax?

Benefit-in-kind (or BIK) is a tax on employees who receive perks from their job on top of their salary. So, if you have a company car that you also have for private use, you’ll have to pay a BIK tax contribution.