We've all been warned about credit scores and the weight and impact that they can have on important financial decisions.
Despite this, recent research has highlighted that more people than ever before are being stung by their poor score - with the majority of these people having no clue why their credit rating would be tarnished in the first place.
A lot of the scenarios that would impact a credit score are pretty simple to understand. Things such as failing to pay bills on time, defaulting on accounts and consistently maxing out credit cards are just a few of the things that would hinder a credit score and most people would admit that they know about these instances and would make a conscious effort to avoid them.
Other things that may eat into a healthy looking financial set are things such as borrowing more than eighty-five per cent of a given credit limit and opening a different account within six months of applying for credit.
With the above in mind, it is easy to see why certain people's credit score would get tainted without their knowledge. On the one hand people are told to apply for credit cards, use them to make purchases and then pay off the balance. This, apparently, shows that a person is capable of good spending as well as making all important repayments.
As we've already discussed, however, it isn't just as simple as taking out a credit card and spending (we're all capable of that!). The timing must be right. People are advised not to continuously reach the limit on their card and the maxing out of the card should only be every so often.
A small portion of people still believe that if they stay away from credit cards and credit in all forms it will mean that their credit score will remain in-tact. This is the opposite of what will happen. People who don't have credit cards and who don't use credit cards regularly will do more damage to their score than people who use the cards to splurge on items every month. There is a fine line.
If it is possible people should try to get a credit card with a credit limit upwards of £300. Anything lower than this amount highlights that you can't be trusted with a limit any higher which may prove to be an issue.
Naturally, no money should be outstanding on payments if a score is to be in tip top shape.
It's not that hard to keep a credit score crisp and clean - just pay off debts within 4 weeks of receiving the bill and that's pretty much it.
There is a little tip that people should know if they are really keen on bolstering their score though, and it is with regard to how and when bills are paid.
When the home or car insurance renewal lands on the doormat, many people will look at the figure that has been calculated and establish whether they can afford to pay the amount in full or whether they will have to pay the bill off monthly.
Most people, if they can afford to do so, will pay the bill off in full in one instalment, and why not? The money goes straight out of the account and can be forgotten about for another 12 months.
Experts unanimously agree, however, that people who choose to pay off these kinds of bills on a monthly basis will bolster their score more than those who opt to pay the money upfront. This may seem ludicrous to some people but that's just the way it goes.