A credit score is your financial reputation in the eyes of banks and lending institutions. It determines whether you can get a loan under what conditions and at what interest rate. A high score allows you to secure better loan terms, while a low score can make it difficult even to qualify for installment payments. This article explains how credit scores are calculated and why they matter.

What Affects Your Credit Score?

A credit score is a numerical representation of a borrower’s reliability. Several factors influence it:

▪️ Payment history. Do you pay your loans, utility bills, and installments on time? Even a few days of delay can negatively impact your score.

▪️ Total debt amount. The more outstanding loans and financial obligations you have, the higher the risk for banks. Using over 50% of your credit card limit can also lower your score.

▪️ Credit history. The longer your history of responsible credit use, the better your score. Individuals with no credit history are often viewed as risky as those with poor credit.

▪️ Number of open loans and new applications. Applying for multiple loans at once signals financial difficulties to banks, which can reduce your score.

▪️ Variety of credit products. Having experience with different types of credit (such as mortgages, car loans, and credit cards) demonstrates financial responsibility and improves your score.

Maintaining a positive credit history and using loans responsibly will help increase your score over time.

How to Check Your Credit Score?

In Ukraine, several credit bureaus compile and provide credit score information, including:

▪️ Ukrainian Bureau of Credit Histories (UBCH)

▪️ First All-Ukrainian Credit Bureau

▪️ Ukrainian Credit Bureau

You can check your credit score online or through banks that cooperate with these bureaus. For example, UBCH offers a «Status Control» service, which allows you to monitor changes in your credit history.

How to Improve Your Credit Score?

Got a low score? Don’t worry — it’s fixable! Here are some effective ways to improve it:

▪️ Pay your bills and loans on time. If you tend to forget, set up automatic payments or reminders.

▪️ Keep your credit utilization low. Ideally, use no more than 30-40% of your available credit limit.

▪️ Avoid multiple loan applications at once. If you need a loan, choose the best option instead of applying to multiple lenders simultaneously.

▪️ Use a credit card with a small limit regularly. Responsible use and timely repayment help build your credit history.

▪️ Check your credit history regularly. This helps you detect errors or fraudulent activities early.

▪️ Avoid new loans if you have outstanding debts. Settle existing obligations before taking on new credit.

Improving your credit score takes time, but consistency pays off. A higher score means better financial opportunities.

Conclusion

Your credit score is your financial passport. It can open doors to favorable loan conditions, better rental agreements, and even job opportunities. Keeping your credit score high is simple — just pay your debts on time and use credit responsibly. The more financial discipline you have, the more opportunities you’ll unlock.