General Article How does credit scoring work?

Topic Selected: Money and Finance
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Every time you apply for credit – a store card, bank account, credit card, even a mobile phone contract – the ‘lender’ will run what’s called a credit check on you. This is a comparison of your financial history against their ideal checklist. If you don’t meet their criteria, you may be turned down.
1. Each seller’s credit check is based on their own credit scoring system. If you don’t pass with one, you may pass with another (although avoid making lots of applications in a short space of time as this forms part of the criteria).
2. The credit check is all about risk – do you look like a reliable payer?
3. If you’re new to bank accounts and credit, you may not yet have enough credit history to pass these checks.
4. A student loan won’t affect your credit rating. You can check your credit history for free at
Managing your accounts well and building up a good rating in the meantime will help – see for more ways to patch-up your rating.


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