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NHS Credit Explained – How Credit Works and How to Improve your Bad Credit Score.

Credit. We hear about it all the time, but what actually is it, and how does it work? If you are working for the NHS and you are searching for personal loans, then you might have questions such as can NHS staff with bad credit apply for a loan, can the NHS Credit Union help me, and what is the Financial Conduct Authority? Within this blog post, we are going to discuss credit and loans for NHS staff, providing you with in-depth answers to all of your questions.

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What is Credit?

Credit is the ability to borrow money or gain access to goods or services with the understanding that you will pay it back at a later date/over time. For example, credit can help you purchase a house or a car.

Your credit history is part of your financial power, and it can help you make decisions such as purchasing a home or getting a loan for a car. To be offered credit, you must have a good credit score. Working to improve your credit ensures you will qualify for loans when you need them, which is why understanding credit is super important.

A good credit score signifies that your financial circumstances are on the right track, and anyone lender considering you for credit would feel that you are a trustworthy person.

What is a Credit Score?

Your credit score says a lot about you, and having a “good” credit score is important if you wish to use the benefits of credit. But what exactly is a “good” credit score? According to Fair Isaac Corporation (FICO) credit scoring model, a credit score can fall into one of 5 following categories:

  • Poor credit: 300-579
  • Fair credit: 580-669
  • Good credit: 670-739
  • Very good credit: 740-799
  • Excellent credit: 800-850

Your credit score is based on your financial history. For instance yYour FICO credit score is made up of the following five factors:

  • Payment history: 35 percent
  • Credit utilisation: 30 percent
  • Length of credit history: 15 percent
  • Credit mix: 10 percent
  • Recent credit inquiries: 10 percent

A FICO credit score is a great way of quantifying and evaluating an individual’s financial creditworthiness. Lenders will use a borrower’s FICO score along with other details, such as credit reports, in order to assess risk and determine whether to extend credit. 

Financial Conduct Authority (FCA)

The Financial Conduct Authority (FCA) plays a big role in the world of credit. As an independant entitiy that operates outside of the UK government, you might hear of the FCA from time to time, so it’s important to understand who they are and what they do.

Essentially, the FCA regulate financial services firms and financial markets in the UK. Through their work, the FCA ensures that credit markets work well for all and that they are authorised and regulated.

Why you should improve your credit score?

Building a good credit score is important, and if you wish to take advantage of the benefits good credit can offer, then improving your score is necessary. From credit cards to savings and benefits, having access to credit is an important factor in your financial health, and improving your credit will open these doors. Take a look at our NHS bad credit tips to improve your score.

Tips to Improve your Credit Score


1. Sign up to vote…seriously, it helps. By registering on the electoral roll at your current address, you can improve your credit score. 

2. Build your credit history. If you have little to no credit history, it can make it harder for companies to assess you. As a result, your credit score may be lower, which is a common problem for young people. 

3. Make regular payments on time. By showing lenders that you are a real (and reliable) borrower, you can build your credit and improve your score.

4. Check for simple mistakes. Something as minor as a mistyped address could be enough for a lender to refuse you credit. Therefore, it is worth checking your credit report thoroughly.

5. Ensure you are monitoring your credit file for fraudulent activity. If a fraudster were to gain access to your personal details, they could take credit out in your name without you being aware. Therefore, make sure you are regularly monitoring your credit file.

6. If you are looking for a way to improve your credit rating, then a credit builder card could be an option worth considering. Typically, a card of this nature will have a low spending limit and high-interest rates, and using and repaying over time can help your score

When searching for the right credit card, it’s important to do your research. Always take the time to research the credit card company you are interested in, as well as the different types of credit cards available on the market. By doing so, you can research if the company/card is right for you. Plus, you will gain an understanding of how to get a credit card and how it could benefit your financial circumstances.

Credit-related Frequently Asked Questions by NHS Employees and Family Members

How can I build my credit in 30 days?

While there is no quick fix to building your credit, there are minor changes you can make that will have a positive impact on your credit score. Take a look at the tips provided below to discover ways you can improve your credit score.

What is the fastest way to build credit?

If you are looking to build credit score, here are a handful of tips that can be achieved in a short period of time:

  • Pay off any debt that you have (if you can).
  • Report your rent & utility bills via an alternative data reporting service.
  • Get a secured credit card if possible.
  • Request a credit limit increase – as your FICO credit score is directly related to the ratio of your available credit.
  • Try to become an authorised user on a friend or relative’s credit card, as their payment history could become part of your credit report.
  • Dispute any credit report errors to ensure your report is as accurate as possible.
  • Ensure your payments are made on time.
  • Keep your balances low.
  • Got an old account you don’t use? Keep it open to show your credit history.

How can I increase my credit score?

  • Build your credit history. If you have little to no credit history, it can make it harder for companies to assess you.
  • Make regular payments on time. By showing lenders that you are a real (and reliable) borrower, you can build your credit and improve your score.
  • Check for simple mistakes. Something as minor as a mistyped address could be enough for a lender to refuse you credit.

For more information on ways to increase your credit score, check out our Tips to Improve your Credit section above.

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 Please note all of the information included within this blog is for educational purposes only. As with all financial products, please speak to an advisor before making a decision.