If you live in east or south-east London, you could find it harder than fellow Londoners elsewhere to afford a loan. That’s because the average credit score in those areas are the lowest in the capital, according to exclusive research prepared for the Standard.
A low credit score means you may have to pay more to borrow money, or you may even be turned down for credit or such essentials as a mobile phone contract.
Residents of Barking and Dagenham have the lowest average score in London at a minuscule 732 — well below the London average of 789. The next lowest scores are found in Newham (743) and Lewisham, at 759.
“Seeing how scores vary from borough to borough reveals a fascinating snapshot of the capital,” said James Jones of Experian, the company behind the research.
It also reveals that those living in upmarket areas such as the City, Richmond or Kingston will find it much easier to be granted credit.
The scores in those boroughs are, respectively, 871, 850 and 829.
But improving your credit score could save you a packet.
That’s because the APR charged on a loan could fall by 2% if you improve your score enough.
Experian reckons that anyone improving their score band from poor (561-720) to fair (721-880) could save an average £381 on a four-year loan of £6000.
So the question is, how can you make your score better and get more favourable financial deals?
“There are a number of ways you can begin to improve your score, with the first step being to check where you stand right now,” says Jones.
“In terms of improving your future score, things such as getting on the electoral roll, keeping your card balances low and not making too many applications in a short space of time can all help you grow your score and unlock better deals.
Doing five simple things can actually help to improve your score by 210 points.
If you keep a credit card balance below 30% of your limit that’ll improve your score by a decent 90 points.
You can then get a boost of 50 points by getting on the electoral roll and another 50 points by not applying for any new accounts for six months.
Lenders like consistency so having the same credit card for five years will give you a further 20 points — and if you’re granted a card limit of £5000 or more, you’ll get 20 more points.
But the quickest way to destroy your score is to not repay a loan. Defaulting on credit will cost you 350 points.
It’s free to check your credit score at the three UK credit reference agencies Equifax, Experian and TransUnion.
- Nine simple ways to improve your credit score
- Social credit scores & Obamacare (E1355)
- Big Tech + Big Brother: Privatized social credit score systems coming to US sooner than we think?
- £3million boost for project to save Suffolk estuary from devastating floods
- FOUR UP, TWO DOWN: Argyle back to scoring ways, injuries pile up
- Teenagers in Norfolk raise money for air ambulance which saved a critically-ill toddler’s life
- Rent-to-own firms capped from April after The Sun’s Stop The Credit Rip-Off campaign
- There are now 25 places where people are better with money than Yorkshire
- What happens to your benefits if you start using a Help to Save account
- More than 3million people on benefits and Universal Credit missing out on £1,200 Help to Save scheme