Credit Scoring In The UK
While most of the major credit agencies are based in the United States, the majority of them have branches in dozens of other countries. What exactly is different about the credit scoring in the UK? Nothing really, well not exactly nothing. The system that is used is the same as everywhere else but a lot of interesting trends occur when you look at other nations. The way in which credit is used can vary vastly from country to country. Comparing the United States and the UK is a prime example of these differences.
Transportation, it's one of life's necessities and all too often it comes in the form of an expensive automobile that requires a whole lot of credit. One noticeable difference about the credit scoring in the UK is that cars cost a lot more. This is because of the various taxes such as the VAT which is put on them. The increased price of gasoline, which is nearly double the cost of what the United States pays often leads to citizens using credit as a form of payment. Since it is so expensive to fill up in the UK, often times its much easier to charge the expensive using credit and pay it off at a later date with the rest of the bills, then to carry the large sum of money it takes to fill the tank.
Shopping, particularly for groceries is another prime example of how two countries can differ in their use of credit. The United States for example tends to have a large concentration of super markets and shopping is done weekly or bi-weekly. This leads to huge bills and again like most large bills, are paid with credit. The citizens that happen to live in the UK tend to shop more frequently at smaller markets and shops which produce, more frequent but smaller groceries bills, which are in turn paid with cash. The differences are subtle but evident and usually can be attributed to the culture or layout of the town.
While the way in which credit is used in the UK, the credit scoring system in the UK is very similar to that used everywhere else. Much like in the United States the credit scoring system in the UK relies upon a formula to take in a great number of variables such as how much debt one has, how often they use credit to make a purchase, what they purchase with credit and how complete their credit history is. The UK credit scoring system is almost identical, the interesting part is it's the culture that truly makes them different. It can be hard to imagine two things which are exactly the same can be so vastly different based solely on where in the world it's employed. Those looking for a difference in the UK credit scoring system need to look no further than the cultures that are prevalent in the UK. Of course there are UK only based credit agencies which use their own credit scoring models. The basic FICO model is used worldwide and is commonly encountered no matter where you happen to live.
Credit Scoring
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