Credit score questions are some of the most common queries we get here at Zopa.
They can be a little tricky, but definitely not more so than some sports, particularly one we’re following here – synchronised swimming. In fact there’s more in common between the two than you might think…
So, let’s take a deep breath, dive in and bob to the surface with a smile. Here’s your quick guide to how scoring (for both synchronised swimming and credit) works:
1) Multiple panels of judges provide the initial scores
Synchronised swimming has two panels of judges; one that looks at technique and the other looks at execution. Both of them provide a score out of five.
In a similar way, at Zopa we use two different credit bureaus for our initial credit checks. This is because, like the two synchro judging panels, each credit bureau takes into account slightly different information, and so by using two (the dual bureau approach, for those in the trade) we can get a more holistic view of someone’s credit history.
For a bonus point: it’s a good idea to check your credit scores before you apply. Find out how to do that here.
2) The scores are given on the basis of lots of different things
The two judging panels take into account lots of different factors to come up with their final score. For the technical judges, it’s execution, synchronisation and difficulty. For the execution judges, it’s choreography, music interpretation and manner of presentation.
In the same way, an assessment of your creditworthiness takes into account lots of different factors. As well as your history of repaying debts and whether you’ve been declared bankrupt, we’ll also look at things like your income to check the affordability of the loan repayment.
For a bonus point: before you apply, do a personal budget that takes into account all of your income and outgoings to make sure that you can afford your loan repayments.
3) Crunching the numbers
Next, the initial assessments need to be crunched into something that can be used. In synchro this involves taking the average judging panel scores, multiplying them by five and adding them together for a number out of 100. Then the two judging panels average scores for the final routine, multiplied by 0.5.
At Zopa, we take the initial information and apply the models we’ve developed from 11 years of lending so that we can build an accurate profile of you to give you a personal quote. We use a ‘soft search’ to do this, so this won’t leave any marks on your credit file. Find out more about how we use soft searches here.
For a bonus point: shop around for the best deal. Lenders use different criteria so there may be some differences in the quote you are offered. Be careful when getting personal quotes though; unlike Zopa, many lenders don’t use soft searches so they will mark your credit file.
4) Decision time
In synchro these final scores represent the moment when the winners are revealed. It’s pretty straightforward - the team with the highest score is the winner.
For Zopa, this is when we decide what interest rate we can offer on a loan. You can read more about how we use credit scores here. This quote depends entirely on your personal circumstances and (unlike the synchronised swimmers) you’re under no obligation to accept it.
Want to find out more? See what else Zopa Explains.