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Credit checking and scoring. Let us put you straight

It may seem easy to get a credit card.

However, there are a number of criteria you must meet before you get your hands on a credit card.

What is a credit rating?

Banks, building societies and other financial organisations compile details of all your payments and transactions. Your credit rating consists of 'black data' and 'white data'. Black data details any defaults, late payments or problems and will indicate if you are a credit risk. While white data details how you generally operate your account, revealing what your credit behaviour has been like in the past.

How is your credit rating calculated?

Tesco Bank use a credit reference agency that provides information about who is on the electoral roll, credit account performance, the number of recent credit enquiries, court judgements and bankruptcies. This information is then combined with our own tailor-made mathematical risk criteria formula to determine your credit rating.

What will affect my credit rating?

Factors that will have an affect on your credit rating are:

  • Payment history - if you pay your accounts on time
  • Public records - if you have any court judgements against you
  • Length of credit history - how long you have had a credit card or credit account
  • Number of accounts or credit cards you have
  • Spend only what you can afford. A credit card does not mean free money. You have to pay back what you spend and you will be charged interest on any outstanding balance at the end of the month.
  • The best way to use your credit card is as a budgeting tool. Don't use it for a loan or as an overdraft.
  • Set your own budget and stick to it. Don't use the card's spending limit as your benchmark. Work out how much you can afford to spend and pay on a monthly basis. Don't forget to include interest in your budget.
  • Build your card payments into your monthly budget. If you do not pay at least your minimum payment, it could reflect poorly on your credit rating.
  • Keep track of when your 0% interest periods are due to end. After the first 0% interest period ends, you will be charged interest each month on any outstanding balance. Interest rates will be detailed on your statement, so it's wise to check to help with your budgeting.

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