For many people, becoming a university student is the first time you are given serious financial responsibility. You have to manage your student loan and any income you might have independently from your parents. Whilst this might seem to be a fairly brief period of your life, the way you handle your finances as a student can have a big impact on your credit score.

1. Make all your payments on time

Repaying your bills on time when you rent at university is an absolute must for a positive credit score. They are one of the main things credit agencies look at to judge your financial responsibility and give you a credit score. Take the responsibility for paying one of the bills and make sure that you always pay it on time. Setting up a direct debit is a good way of making sure this happens.

2. Register on the electoral roll

Putting yourself on to the electoral roll is another way to improve your credit score. It allows credit agencies the reassurance that you are who you say you are and that all the information you have provided to them is accurate. Without it, credit agencies can be wary of the potential for fraudulent activity, lowering your credit score as a result.

3. Keep any credit card limits and usage low

If you have a credit card: good. Having a line of credit which you repay punctually each month is a good way to prove your responsibility and improve your credit score. However, it’s important to keep your balance and usage as low as you can. This just helps to hammers home the point that you can be trusted with additional money.

4. Be good with your bank balance

Almost every student has an overdraft limit – it’s borderline necessary to have one if you are to make the most of a university lifestyle. However, whilst it might be tempting to see this as ‘free money’, managing it in the right way is essential to your credit score. So, don’t be silly with your spending. Make sure you have a comfortable amount in the bank each month.

Student life is a major turning point for lots of people: you’re constantly learning new things about your subject as well as about yourself. This learning process extends into how you look after your money. Being financially responsible as a student sets a precedent for the years to come and is the first real chance you get at improving your credit score. So, make it count.

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 24.6%, annual interest rate (fixed) 24.57%, 47 monthly payments of £237.00 followed by 1 payment of £247.00 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £3,886.00, total amount payable is £11,386.00.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!