Skip to content

What is a Balance Transfer card?

One of the most popular types of credit card offers is the balance transfer card. These cards are designed to help you move your existing debt from one credit card provider to another. This can help you take control of your debt and give you some respite  from paying higher interest – though you’ll still have to make your minimum repayments.

Balance Transfer Cards are a great way to consolidate debts into one manageable sum or to reduce interest payments. Balance Transfer Cards offer a low or 0% interest rate for a fixed period as an introductory offer, so it’s a great opportunity to save some money which could have gone on interest payments with another card provider.

Should I use a Balance Transfer Card?

If you have used your credit card for some big purchases recently such as a holiday, home improvements or for Christmas, chances are, the debt on your credit card will lead to a typical interest rate of about 21% and repayments may become difficult.

By taking out a Balance Transfer Card, you could be able to move this debt into a 0% interest deal for a fixed period of time which could be anywhere between six months to more than two years, it could be a great opportunity to save some of your well-earned cash or make progress paying down that debt!

Important things to consider…

There are some things you need to think about before applying for a Balance Transfer Card. Firstly, card providers often charge a fee to take up these offers. These fees can be between 1-5% of the total value you are transferring. This is how the lender makes money from the offering. For example, if you were transferring a balance owing of £1,000, you are likely to have to pay a fee of up to £50. Make sure you factor this fee into any of your calculations before applying. Some card providers may not charge this fee, but are likely to have shorter introductory interest rate periods.

Secondly, after the introductory period ends, the interest rate will reset to its standard variable rate. This could lead to considerably higher repayments. You could set up a direct debit to help you pay off the debt in time. 0% Balance Transfer Cards can have a variety of different windows on their introductory offers, so make sure you choose the offer that is right for you.

Do not miss or make late repayments on your card. This could hurt your credit score as well as prompt your card provider to recall their introductory offer – leaving you on the hook for the higher interest rate.

Be aware that the introductory interest rate for balance transfer cards is usually on the balance, not on purchases (unless this is made clear in the offer). That means if you use your balance transfer card as a payment card, any items you buy may attract  high interest rates, for example, 21% on purchases, even during the introductory period.

Lenders may provide credit under several different brand names for cards, and you’ll need to understand that it is unlikely you will be able to switch your balance from one card provider to another within the same group. For example, Virgin Money and Yorkshire Bank both sit within the Clydesdale Bank Group, and M&S and First Direct sit within the HSBC Banking Group.

Also, Balance Transfer Cards often have a limit on how much debt you can transfer to the new card. This might be 90-95% of your credit limit.

Finally, make sure you have done your research. Check your credit score with Credit Karma and use our credit factors to make sure your score is in the best position it can be. Check out the offers on our marketplace, you may be able to find a card you already know comes with a high chance of approval. Be sure to do your sums, work out how long you’ll need to pay off the debt and what is a realistic amount to pay off each month. Always read through the terms and conditions to make sure you are aware of all the repayments and fees.


How to prepare your credit score to get a mortgage

What credit score do I need to get a mortgage?

This is one of the first questions people usually ask, but it’s not quite that black-and-white. 

There’s no minimum score level that can unlock the mortgage you need to buy the home you want. Mortgage lenders use credit scores to understand what you’re like as a borrower so they can decide whether to lend you money and on what terms.

As with other credit products, like credit cards and loans, you should aim to get your score in the best place possible before you apply – this will give you a better chance of getting a good mortgage deal.

How do I improve my credit score and how long will it take?

You can improve your credit score by understanding how credit reference agencies work it out. With Credit Karma you can see your TransUnion credit score, and we’ve made it easy to see what needs work.

Just head to your Credit page to see where you’re at with your credit factors and go into each one to see what you can do to improve it.

We recommend giving yourself as much time as possible to work on these fixes for your score, as it can take a while before changes you make will filter through and improve it.

How do I stop my score taking a hit when I’m applying for a mortgage?

Multiple applications for credit can hurt your score – and a mortgage is no exception. So it’s important to give yourself the best chance of success first time.

We think it’s a good idea to try to get a Mortgage in Principle first, because then you’ll know where you stand when it comes to applying for the real deal. 

Applying for a Mortgage in Principle is pretty straightforward, if a bit long-winded. It involves giving a lender lots of information about you and your finances. But you should be aware that sometimes the lender will run what’s called a ‘hard’ search on your credit file to assess you. 

Hard searches can hurt your score, so it’s worth doing some research and looking for a Mortgage in Principle that only requires a ‘soft’ search. Soft searches don’t hurt your score – that’s why we use them in Credit Karma’s credit card and loan marketplace.

A Mortgage in Principle can help you strengthen your offer for a property, as it shows a lender has made an initial assessment of your finances and decided how much they’re willing to lend you. It gives sellers confidence that you’re ready to buy.

How do I know my score’s ready to apply for a mortgage?

Once you’ve given a Mortgage in Principle a go and done everything you reasonably can to get your credit score into a place you’re happy with, you should be in a good position. 

Oh, and you’ll want to have found that perfect property and had an offer accepted. We can’t help with that bit unfortunately – and we know from experience that it’s easier said than done. 

Try to stick to the guidance shown in your credit factors while you’re going through the process though. It’s best not to rock the boat during that time, so try to avoid applying for too many other products and be extra careful to keep on top of your other credit payments. 

The bottom line

There’s no minimum score requirement when it comes to getting a mortgage – instead, think of it as the better your score, the higher your likelihood of being accepted for a mortgage, and the better the deal you could get on your mortgage. To get a better score, you need to tackle the factors that underpin it – more on that on your Credit Karma Credit page. A Mortgage in Principle  can help you work out where you stand before you apply for the real deal – better to be safe than sorry, as a hard search for an unsuccessful mortgage application  could hurt your score and set you back when you try again. 

We hope you find Credit Karma useful in getting your score prepped for the big move – don’t forget to visit your Credit page to figure out how to make financial progress. 


Money getting in the way this V-Day?

Who should pay on a first date is an evergreen argument played out in pubs, living rooms and workplaces across the nation every day, and as a consequence, reflected in the media regularly. But ethically and economically, what is the correct answer?  

Credit Karma consulted Professor Shireen Kanji, gender equality specialist at Brunel University, for her insights into the complexities of gender when it comes to dating and money. Using her experience of the role of money in modern relationships, we’ve created a Split the Bill Calculator for couples looking to divide the bill fairly this Valentine’s Day.

Shireen Kanji, gender equality specialist at Brunel University, discusses Credit Karma’s ‘Split the Bill’ campaign

Cultural scripts – collectively held views around how men and women should behave and what they should do on a date – exert a strong influence, as much research shows. Old-fashioned stereotypes about gender roles continue to reflect ideals of male dominance. Thus, there has been surprisingly limited change in dating behaviours since the 1950s, even with the advent of internet dating.

It still seems to be largely the case that in the 2020s, men are meant to take the lead, while appropriate behaviour for women is to wait passively for a man to choose them. Cultural scripts operate at the societal and group levels while interpersonal scripts guide how men and women should interact with one another. Interpersonal scripts dictate that men are meant to make the moves and women to act as gatekeepers.

Even if there are cases that challenge this type of gendered interaction, they are insufficient to challenge the dominant script that on first dates men should ask the woman out, make the plans, pay and, where the situation is inviting, initiate sex. Women are meant to focus on their appearance, which is necessary in the game of dating because physical appearance is more important to men than women in date and partner selection. Women are also meant to make conversation, enjoy the man’s company, and act as gatekeepers by accepting or rejecting the man’s sexual advances.

These patterns of behaviour in dating set the scene for the unequal power relations which seem to continue as dating moves into relationships. In the dating context money has a social meaning which goes beyond the share of the dinner that it buys.  

First dates serve the purpose of reducing uncertainty by allowing people to get to know a potential partner. But the persistence of stereotypes over who should pay, and in particular the unspoken nature of what they are paying for, hinder getting to know the other person. Credit Karma’s Bill Splitting Calculator helps to break the taboo over speaking about money.

We can argue over who should pay what and which factors should be included in considerations of who should pay the bill, which is exactly the aim – to start to speak about what has previously been hidden and to discuss what is fair. If one person works in a job that pays less well than the other, we can start to speak about what a fair contribution might look like. If a woman needs to spend more on her travel because of security concerns or eats less at the meal, then daters and couples can start to unravel whether this is fair or what they want. 

Even after decades of progress in women’s paid work participation, men still tend to out-earn women in opposite sex couple relationships. Women are less likely to progress to the higher ranks of organisations which limits their pay progression. Moreover, occupations that have a high concentration of women, such as health and social care, tend to be relatively worse paid. Caring responsibilities, particularly, having children, bring a radical shift in the relative earnings of each partner in a couple.

Considerable research shows that the gender pay gap tends to increase with age and has a distinct pattern, widening as women get older and then narrowing again over time. The gender pay gap is diminishing for younger generations, which suggests that the dynamics of power in heterosexual relationships amongst younger people may be shifting. But past experience tells us that today’s younger women are also likely to experience a pattern of widening gender pay gaps as they get older, particularly if they have children.


Why do I need good credit scores?

Once you enter the grown-up world of work, and you start to earn money — and pay bills — and think about things you might like to buy, you may start hearing the phrase “credit score.”

You’re also likely to hear how having a “good” credit score can impact your future spending. But where do you get one? How do you get one? And —  most importantly — why do you need a good one? 

When that pay packet drops into your bank account for the very first time, it is an exciting moment. Let’s face it, you feel like a proper grown-up. You’ve got yourself a job, you’ve earned your own money and well, you’d certainly like to spend some of it.

And this is when temptation comes calling. We’ve all been there. A few Saturday nights out here, a couple of shopping sprees there — and we can quickly end up spending more than we can afford without giving any thought to how this might affect our financial present, let alone our financial future. And this is where understanding your credit scores comes in.



You are not alone

According to a recent YouGov survey, 69% of British adults don’t know their current credit scores or what they mean for them.

With this figure in mind, it’s fair to say that quite a few of us — regardless of generation — are in the dark when it comes to our credit scores. But in this case, ignorance is not bliss and there may be a time in the not-too-distant future when enlightenment is required. What if your newly acquired car breaks down and you need an interim loan to fix it? Or you want to apply for a new credit card or, gulp, a mortgage? Healthy credit scores can be pivotal to your ability to borrow or find preferential rates. But before we get into that, let’s go on a fact-finding mission.

Back to basics

What are credit scores?

Broadly speaking, a credit score is a number between 300 and 850 that depicts a consumer’s creditworthiness. It is based on your credit history, such as how quickly you repay debt, how high any debts might be or how much you have borrowed. As lenders use credit scores to decide whether someone is likely to pay back money in a timely manner, our financial lives may depend on them.

How your credit score is determined by Credit Karma

At Credit Karma, we work to a maximum score of 710 to calculate your credit score. Typically, the higher your score, the more likely you are to qualify for a loan with more favourable terms, such as lower interest rates, higher amounts and potentially lower fees. 

Our scores may look different compared to other specialists because they’re calculated by TransUnion. Other providers may use different reference agencies and other parameters, but essentially all scores are based on information in your credit reports. Our Help Centre has some great guidance for understanding this!

What impacts your credit scores?

Your credit scores can be affected by a number of factors. For example, if you have built up a long-standing history of on-time payments, that suggests you have a positive longstanding relationship with lenders.

However, if you have a poor on-time payment history, this could suggest you may have trouble paying back a future loan and it is therefore a red flag to credit card providers, lenders and even utility suppliers.

Aside from increasing interest or incurring late fees, you may find that credit reference agencies are notified and your credit reports are impacted. Even moving house several times can have a negative effect. Why not take a look at our key factors page for more detailed information.

How to get a good credit score

So now that we know what a credit score is, how do we go about getting a good one? A good place to start is by paying bills on time – the sooner you pay, the better.

If you’re struggling to pay, get in touch with your lender and arrange a repayment plan or even a payment holiday. Other things to consider include whether your credit rating could be linked to another person, such as a spouse or a friend through a joint account. Their poor record may be bringing you down. You can also check for mistakes on your file or fraudulent activity, which are not your fault. Finally, take a look at 6 easy ways to improve your credit scores for more great tips.


Bottom line

The good news is that no matter your age or history you can always work to improve your credit score, and there’s no better time to start. And wherever you’re starting from, improving your credit health can improve your overall financial well-being. And staying on top of the information in your credit report is the first step toward progress.


Mind the gap. The gender credit one, that is.

A costly inequality: Women pay nearly £17,000 more to borrow over a lifetime.

To be more precise, Credit Karma has discovered that the gender credit gap between men and women across their lifetimes is £16,913. That’s a decent chunk of money. You could use it toward a deposit on a home. You could buy a new car with it. You may even be able to buy three new Rolex watches with it — if that’s what makes you tick.

But disengagement with monetary matters, a fear of credit and a reliance on partners taking the financial lead are all making it more expensive for women to have a loan of their own.



Encouraging women to have a more hands-on approach

Credit Karma has researched the ability of women to borrow and benefit from preferential interest rates — to see how it compares to their male counterparts. Using Qualtrics Research (more on this at the end if you’re statistically inclined) — combined with data on male and female credit score distribution — we hope our new data-driven insight will encourage women to have a more hands-on approach to managing their money.

Credit scores that ‘need work

At the moment, women are more likely to fall into the “subprime” category for lenders. Put simply, this means they’re viewed as more risky by lenders. This makes accessing financial products — such as personal loans, credit cards and mortgages — harder or more expensive.

13% of women have a credit score below 500

According to our insight, the average credit score for men is 705, compared to 652 for women. What’s more, 13% have a credit score below 500, compared to only 6% of men. With Credit Karma, scores of below 565 fall into the “need work” category. Find out more about the different tiers of scores and what they mean for you.

Why might women’s credit scores be weaker?

Then there’s the all-important why behind the gender credit gap. Why are women’s credit scores, on average, coming out lower — making it more expensive for them to borrow? Our research reveals that one of the biggest reasons behind this is relationships. Nearly a third (31%) of women have some or all of their financial agreements in their partner’s name.

This is a hurdle because it limits credit exposure. And should their relationship end, it would leave them with little or no credit rating.

Healthy credit

This is not the whole picture. Our research shows that women also appear to be more opposed to credit than men, with only 70% taking out credit cards, compared to 76% of men. There’s a similar gap when it comes to mortgages. And yet opening a new credit card account can add to your credit utilisation rate. If you keep your utilisation active and below 25% month-to-month, then this number should positively contribute to your score.

Why do credit scores matter?

Although you may not currently need a loan or a credit card, your situation may change in the future. So, improving your credit score now can stand you in good stead in years to come.

Many lenders choose not to lend to those whose credit scores are low, as they view them as less likely to be able to pay on time. If you’re in this situation and you do secure a loan, then you may be exposed to extra fees.

Just as actions you’ve taken — or inaction — in the past may have negatively affected your credit scores, small changes from now on can make big differences. Here’s how you could start making progress right now.

3 simple steps for women to become more appealing to lenders

  1. Have a mobile phone contract or a credit card in your name — not your partner’s. Lenders can’t assess your creditworthiness if you’ve never had credit.
  2. Pay your bills on time. Missing a payment can significantly impact your credit score — even if it’s only by a day or two. Paying bills off in full and on time shows that you are good at managing your money.
  3. Get on the electoral roll. This provides proof of address and that you have stable living arrangements.

Bottom line

In this way, women can become more engaged with their own finances, less fearful of the unknown and less reliant on their male partners and family members — and in doing so, take ownership of their own financial futures.


Methodology

Credit Karma commissioned Qualtrics Research to interview 1,012 U.K. adults between 16 February and 5 March 2021. This was combined with analysis of macro data on male/female credit scores distribution.

Here is a snapshot of the findings, on which this article is based:


Debunked: 4 myths about switching gas and electricity provider

There are lots of myths floating around about switching energy providers. The truth is, the whole process is pretty much taken care of by your current energy provider and your new energy provider once you’ve set the wheels in motion.

On average, the whole process is complete within 15 to 20 days. You’re guaranteed not to have a gap in your energy supply while the energy provider switches over, and you won’t be billed twice while it’s happening either.


  1. It’s not worth switching – all energy providers charge pretty much the same
  2. It takes forever to switch energy providers
  3. I’ve heard you can end up getting your energy supply turned off while energy providers switch over
  4. I’ll only end up being charged twice while my energy providers switch over

1. It’s not worth switching – all energy providers charge pretty much the same

Switching energy providers can feel like just another form of “life admin.” but the sad reality is that being loyal and sticking with the same provider can really cost you big over time.

Research by the energy regulator Ofgem revealed that people could stand to save £260 over the course of a year by switching to better tariff with a different provider. That’s the equivalent of £20 a month.

As is the case with most bills and services, new customers typically do get the best deals.

2. It takes forever to switch energy providers

Finding a new deal and applying for it is the only bit you’ll have to do yourself. Depending on who you go with, this can take anywhere from 5 minutes upward.

Once you’ve locked in a saving you’re happy with — and there are some surprisingly good deals out there given you’re paying for the same energy — your current energy provider and your new energy provider talk to each other to figure things out for you.

According to Ofgem, the current total average switching time sits somewhere between 15 and 20 days. Not too bad really, considering your only job is to set things in motion and let the pros take over.

3. I’ve heard you can end up getting your energy supply turned off while energy providers switch over

This comes up a lot, and it’s a fair question. Nobody wants to lose electricity or gas, even for a little while.

The good news is that there’s no risk your energy will be cut off. Everything about the way the energy is supplied will remain the same, it’s just the brand that’s supplying it that will change.

This is another element you needn’t worry about, as your new energy provider will arrange to take over from your current energy provider in the background.

4. I’ll only end up being charged twice while my energy providers switch over

You might receive two bills in the month that the switch takes place, but your new energy provider and your current energy provider will use the same meter reading to open and close your respective accounts. That means there’s no chance you’ll pay for the same energy twice.


Bottom line

When it comes to energy supply, the onus is unfortunately on you to make sure you’re getting a good and fair price. Think of it this way: Gas and electricity are the exact same products no matter who is supplying them to your home, so it makes sense to only pay what you have to.


Anyone can get into debt. But how to get back on track?

Getting into debt can be worrying and isolating, but it’s never too late to start getting on top of those bills and breathe new life into your credit score.

If the past year has taught us anything it’s that we’re all vulnerable to losing our jobs and finding ourselves up to our necks in debt. Most of us have regular bills that need paying, including mortgages, energy bills, credit card accounts and school fees.

Perhaps you’ve taken out a repayment plan on that snazzy new car you’ve always dreamed of or have holidays booked and weddings planned. Sometimes, we simply have eyes bigger than our bellies when it comes to spending.

Of course, on top of the usual stresses and strains of life, we have had to deal with COVID-19; the pandemic has been ruthless in its desecration of finances for many of us. Add to this lockdowns and the separation of families and loved ones, and it has been easy to feel isolated and perhaps even a little embarrassed that things aren’t looking quite as rosy as you’d like in the money garden. 



You are not alone

According to research by money.co.uk, 1 in 4 people in the U.K. have incurred debt because of COVID-19, with 25- to 34-year-olds taking on the most debt into 2021. Furlough schemes, while keeping many companies afloat, have nonetheless left employees short of cash, meaning that almost £10 billion of personal debt has been accrued because income has been reduced.

Internalising our problems, however, can lead to mental health concerns and affect our relationships too. So, a good first step on the road to financial recovery is to share a problem with others — you might even find that the person you turn to has had a similar experience and sound advice to offer. If nothing else, the act of telling your story may lighten the load a little.

Who can help?

But what if you don’t feel that you can share your concerns with friends or family?

Fortunately, there are plenty of organisations that can offer free impartial support, including the Citizens Advice service and the debt charity StepChange. If you would rather begin by chatting online, take a look at nationaldebtline.org, which is packed with information and provides web-based advisors.

The road to recovery

The good news in all of this is that there are a number of steps you can take to get back on track. A useful place to begin is by checking out your credit scores. This will help you better understand how lenders see you. In turn, you can see whether there are errors you can rectify or simple procedures — such as going on the electoral roll — that can stand you in good stead going forward. Why not take a look at our Help Centre for the key factors that affect your credit scores as a starting point?

Our page on financial help during the coronavirus outbreak can also give you some guidance on switching utility suppliers, payment breaks and which funding you can apply for.

Getting support

Take a breath. In May a new government scheme, Breathing Space, was launched for people struggling with debt. The statutory Debt Respite scheme, covering England and Wales, will offer those who need it a 60-day period of legal protection while they work with a debt adviser on a long-term solution. A similar statutory moratorium scheme has existed in Scotland for some time and the protection period was recently extended to six months on a temporary basis in response to the pandemic.

Even if you’re in debt, you still have rights — you can speak to your lender and discuss a new repayment plan or a payment holiday. According to the National Debt Line, creditors have to treat you fairly and consider your offers of payment and consider freezing interest charges — if you ask them.

Debt: The good and the bad

Good debt vs. bad debt — yes, this really is a thing. Debt means that you owe money but what you owe and how you owe it makes a difference. “Good” debt helps you to increase your income or acquire assets, while “bad” debt is used to buy things that almost never increase in value, such as cars or clothing. Examples of good debt include student loans, business loans or mortgages while bad debt includes credit card balances. Understanding the differences can help you to understand your own debt and responsibilities.

Of course, it’s important to remember that pursuing debt solutions, having mortgage holidays or speaking to your lender about a different repayment plan can affect your credit rating. However, you will still be in a better position than by doing nothing, and any positive steps will help you to rebuild your credit rating for the future.

Bottom line

To misquote that old phrase, life has thrown us a lot of lemons in the past year, but that doesn’t mean that the future has to be sour. These days, there is help and support aplenty when it comes to debt. With a few simple changes, you’ll soon be on the way to making lemonade again.


6 easy steps to improve your credit scores

So you’ve discovered you have credit scores, and if you’re reading this, you’re clearly keen to keep yours in good shape. Which is great news because maintaining positive credit scores can help you out with all kinds of financial situations.

The last 12 months have been tough, but they’ve given us all time to think about what really matters in life. While some of us have been able to save some money and perhaps pay off some major bills, others have faced financial hardship. Whatever your situation — now that hope is on the horizon — it could be time to think about the future and put some plans into action.

These plans might involve getting on the property ladder, buying a new car, booking that special longed-for holiday or simply securing a better mobile phone contract. Whatever it is that you’re aiming for, it’s important to get your financial ducks in a row — and a useful place to start is with your credit scores.


A quick recap

Your credit scores are based on your credit history, on factors such as your payment history as well as how much of your credit you’re currently using. It is usually calculated as a number between 300 and 850, which shows a consumer’s creditworthiness.

Lenders then use this to assess whether you are likely to be able to pay back money in a timely manner. Credit Karma uses the credit reference agency TransUnion — with a maximum score of 710 — and, generally speaking, the higher your score, the more likely it is that you will qualify for more favourable terms on loans. For more on why good credit scores are important, take a look at our Help Centre for more information.

Remember your scores are just a guideline, and they can go up or down. But there is plenty you can do to maximise them, and you can start anytime. Read on for our six simple steps to set you on the right course.

Where do I start?

1. Register to vote

The simplest way to boost your scores is to get yourself on the electoral roll. This proves where you live and illustrates responsible behaviour. The longer that you’re registered at one address, the better — but remember, if you move house you need to re-register regardless of whether it’s an election year.

2. Improve your credit behaviour

We know old habits die hard, but now could be the time to get any spending in check. Aside from leaving your laptop out of the bedroom (no online shopping in the small hours!), think about how you can be more financially savvy. Make sure you stay within your credit limits and pay bills on time. If you’re in a sticky situation, contact your lender or credit card company to discuss repayment options and have a think about where you can save money. For example, you might consider switching energy suppliers.

3. Keep those credit cards in check

As we mentioned above, credit card utilisation — or how much of your available credit you’re using — is one of the factors that can affect your credit scores. If you have a lower utilisation rate — ideally below 25% — it tells lenders that you are not relying too heavily on credit.

So think about how you budget and ask yourself — honestly — “do I NEED X, Y or Z, or do I just WANT it?” There’s a big difference, and it might help to weed out unnecessary spending. And, as ever, once a bill comes in, pay it on time wherever possible.

4. How many bank accounts does one person need?

There can be some tempting offers along the high street when it comes to opening up a new bank account. But before you do so, please bear in mind that opening a new account can affect your credit scores. To stop this from happening, try not to open more than one or two new accounts in six months.

If you have several new accounts on the go, it can send out the wrong kind of message — not only that you’re credit hungry, but also that they might be the result of fraud.

5. Only borrow what you can afford

This might seem obvious, but it’s very easy to fall into the trap of borrowing more than you can afford to pay back. And as borrowers of yore will tell you, the road to ruin is paved with good intentions. If your finances start to spiral out of control and you run into serious debt or even bankruptcy, your credit scores can be in for some long-term battering. This comes in the form of “derogatory marks” caused by insolvencies, defaulted accounts or court orders and can be visible on your score for up to six years. If you’re struggling because of the coronavirus outbreak, we have some guidance that might help.

6. Look out for errors and fraudsters

Having worked hard to improve your credit scores, how frustrating would it be to see them affected by false information or fraudsters? What if your address is incorrect or a missed payment wasn’t, in fact, missed at all? Maybe that online purchase wasn’t simply a giddy mistake in the middle of the night? All these things can have a negative impact. Check your bills carefully and make sure any personal information is correct. You can usually take up discrepancies directly with lenders, so why suffer for someone else’s mistakes?


Bottom line

As ever, there is always something you can do to begin your journey to financial well-being, and the steps can be small and steady. Simply begin by checking out your credit scores, safe in the knowledge that anything you do to improve them may pay dividends in the future. And when that longed-for post-pandemic holiday comes along, the experience will be so much the sweeter.


How women can bridge the gender gap to financial equality

The U.K. has come a long way since suffragette Emily Davison threw herself in front of the King’s horse at the 1913 Derby. Yet women still need to work hard to make themselves economically appealing.


In a world where #MeToo and pay transparency campaigns are commonplace, it may be hard to believe that there’s still disparity between how a woman and a man are viewed by lenders. This gender credit gap is down to a number of factors, some of them unwittingly created by women themselves.  

Perhaps it’s because women have more gaps in their employment history or are still labouring under the societal stereotype that men take charge of the finances. And there are still some staggering statistics, such as those reported in the Financial Times, that show 90% of women still work for companies that pay them less than male colleagues. 

Whatever the reason, female financial literacy and confidence seem to lag significantly behind. As a result, it often follows that women are less likely to be financially independent and therefore have fewer savings, lower earning potential and are considerably less attractive to lenders — should the need arise. 

If as a 21st-century woman you are shaking your head and saying, “No, that’s not me,” perhaps ask yourself a few questions: Whose name is on the household bills? Do you have your own credit card? Who organised the car insurance? Have you opened a bank account in your own name? If the answer is “mine, yes, me, yes,” then congratulations, as research undertaken by Credit Karma shows you are one of the few.



Sisters are not doing it for themselves

Did you know, for example, that up to 31% of women have some or all of their financial agreements in their partner’s name? Of course, at the time it may have seemed simple and obvious to organise bills in this way, but over the long term it can be damaging to your credit scores — especially if you find yourself in a situation where you have to navigate the choppy waters of financial freedom alone. 

You are also particularly at risk if you are heading toward retirement, according to the International Monetary Fund, which states that because women spend less time in the labour market, they are less likely to reach highly paid senior positions and face increased poverty in old age. 

And while it may seem like a case of it never rains, but it pours, the pandemic hasn’t helped either.

“The last year has been incredibly challenging for everyone, but it’s concerning to see that women face being affected disproportionately in the long term,” said Akansha Nath, Head of Partnerships at Credit Karma. “There is no reason borrowing should be more expensive for women than their partners, but there are a number of simple solutions that can make them more appealing to lenders.”

How a partner can bring you down … in the credit stakes

The biggest debilitating factor for a woman’s credit score is financial association — this is when you share a credit card, mortgage or an account with someone else. By doing this you automatically share credit score information too. Such accounts can make life simple, but they also have a downside.

First of all, your partner’s credit score may not be as healthy as yours, especially if they are a bit slapdash when it comes to their own bills.

Secondly, having an account that isn’t purely in your name limits your credit exposure, meaning that if you had to go it alone lenders have less confidence in you. According to StepChange, the debt charity, these factors — as well as gaps in employment or part-time hours — can mean that women are more likely to be at risk of finding themselves in debt.

Reboot your credit scores

So, how can you get things back on an even keel?

Educate yourself — By this we mean improve your financial literacy. Men have done this because society expects them to, and there’s no reason why you can’t understand contracts or lending agreements just as well or better.

Be brave — Take out a new credit card or mobile phone contract in your own name. This will give you credit exposure, which shows lenders that you can be relied upon financially and will improve your credit scores. This in turn is important because it determines your borrowing potential and whether you will be able to apply for credit cards, mortgages and loans.

Punctuality is everything — Pay your bills on time. If you miss payments or even delay them by a few days, this can have an adverse effect on your credit score. Take a look at our Help Centre for the other key factors that can affect your rating.

Back to Emily Davison — Yes, your being on the electoral roll is vitally important. Not only do you get that all-important right to vote, but it shows that you have stable living conditions and proof of address.

Check and check again — You can check your credit scores to see if there is any faulty information or false associations bringing them down. If you find any, let us know as we can help you dispute errors. Take a look at our Help Centre to see how. 


Bottom line

The good news is that things are starting to change. According to ourworldindata.org, the gender pay gap has decreased in recent years, and a survey by MoneySuperMarket showed how 47% of women are now the primary breadwinner and responsible for all household bills. There’s no better time to take control of your bills and your credit scores. Make the most of your financial girl power.