Imagine your credit score as a financial report card. This three-digit number reflects your history of borrowing and repaying money. Lenders use it to assess your creditworthiness – basically, how responsible you are with borrowed cash. The higher your score, the more financially trustworthy you appear.
Here's the good news: simply claiming Universal Credit doesn't show up on your credit report. Your credit report details your borrowing history, such as loans, credit cards, and mortgages, not your source of income. So, claiming Universal Credit itself won't directly damage your score.
However, there can be some indirect effects to consider. If you haven't used credit cards or loans before relying on Universal Credit, your credit history might be a bit thin. Lenders often prefer a longer track record of managing credit responsibly, so a thin credit file might mean a lower credit score.
Universal Credit is designed to meet your essential needs, but it might not leave much room for creating a savings buffer. Building a good credit score often involves demonstrating responsible management of both credit and savings.
Even while claiming Universal Credit, you can still take steps to build a healthy credit score:
Credit score success starts here! Building a stellar credit score takes time and effort, but with smart financial habits, you can achieve credit score superstardom – Universal Credit or not!