The first step to managing your money

A straight talking guide to credit

We can’t all become an overnight credit expert and unfortunately we can’t always access a credit expert when we’re trying to understand how to improve our credit score. That’s why we’ve put together this helpful, 'straight talking' guide to understanding credit. It’ll only take a few minutes to read and when done you might just be in a more informed position when it comes to borrowing. Take a look at our credit cards.

The first step to managing your money is to understand credit and how it works.

What is credit?

Put simply ‘credit’ is borrowing money with the agreement to pay it back at a future date, for example, taking out a personal loan or a credit card is a common way of acquiring credit. Before a lender will agree to lend you money they’ll carry out a credit check. A credit check involves looking at your credit report and credit history together with other considerations such as your current financial situation. This is done to try and understand your ability to pay back the credit you acquire.

Your credit history is made up of factors such as previous borrowing history, repayment behaviours or any problems you may have had in the past with making repayments. Lenders have access to certain elements of this information and use it to make a judgement on the types and the levels of borrowing you could qualify for.

What does “good credit”, “bad credit” and “no credit” mean?

People often talk about having a good credit rating, a bad credit rating and no credit, but what does this mean?

  • Good credit is when you have paid back what you owe on time without missing payments. A history like this helps lenders feel confident about lending money to you.
  • Bad credit is when your history shows that credit or utility bills haven’t been paid on time or they’ve been missed. This causes lenders to have less confidence in lending to you, and makes it harder for you to borrow or take advantage of lower interest rates.
  • No credit can be the result of not having had credit before which means there’s no history of your ability to repay the money on time.

Safeguard your credit score

With our eligibility check you are able to understand whether you may be accepted before you apply. Our eligibility check means we use a "soft" search to understand your chances of being accepted. This search will only be visible to you and us, will not be seen by other lenders and will not impact your credit score.

The advantages of having a good credit history?

There are many advantages to having a good credit history. Good credit tells lenders that you are more likely to pay your borrowed money back at a future date. It also gives lenders confidence that you’re more likely to make payments on time.

How to improve your credit score

Tips to help build good credit:

  • Stick to your credit repayment schedule: Make sure you make repayments on existing credit, such as credit cards, loans or a mortgage, on time.
  • Your credit history spans across borrowing: A good “credit history” helps, for example if you have or previously have held credit cards, loans or a mortgage and have made regular repayments on time.
  • Be aware that you are responsible for your history: If you’re planning to borrow credit then put together your own plan for how and when you’ll repay your borrowings.

What makes a good credit score?

Your credit score plays an important factor in how lenders decide if they will lend to you. It can also affect how much you can borrow and sometimes the interest rate you’ll be offered. Different lenders have different scores, but common factors which affect your score include:

  • What other financial accounts you have, how many you have and how long you’ve had them.
  • Your total borrowings
  • Whether you have made or missed payments on credit you have previously held
  • Other information from public records.

It sounds obvious but making sure you can make payments on time will increase your ability to access better deals in the long term.

Please note: The contents of these pages are not intended to be taken as financial advice or recommendation made by Creation Financial Services Limited or Creation Consumer Finance Limited. You should seek independent financial advice if unsure about your financial needs.

For more information visit the main credit referencing agencies in the UK:



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