The spread of Covid‑19 and the measures to contain it are having a significant impact on the UK and many countries around the world. Activity has fallen sharply since the
beginning of the year and unemployment has risen markedly, both domestically and globally.

The unprecedented situation means that the outlook for the economy is unusually uncertain. It will depend critically on the evolution of the pandemic and how governments, households, businesses and financial markets respond. Recognising these uncertainties, the MPC has constructed a plausible illustrative economic scenario based on a set of stylised assumptions. While the scenario is highly conditional, it helps to illustrate the potential impact of Covid‑19 on the economy and the channels through which that impact is felt.

Alongside a number of estimates of the sensitivity of the economy to a selection of key variables, it also serves to illustrate the important drivers of the outlook. The illustrative scenario incorporates a very sharp fall in UK GDP in 2020 H1 and a substantial increase in unemployment. The fall in activity should be temporary, and GDP should pick up relatively rapidly as social distancing measures are relaxed. Nonetheless, because a degree of precautionary behaviour by households and businesses is assumed to persist beyond that point, the economy takes some time to recover towards its previous path, with risks skewed to the downside. In the near term, CPI inflation is likely to fall significantly below the MPC’s 2% target, given falling energy prices and the weakness of demand. It rises to around the 2% target further out.

The MPC will continue to monitor the situation closely. Consistent with its remit, it stands ready to act to ensure price stability and support households and businesses in a way that
helps to minimise longer‑term damage to the economy

Many of us already know that our credit score can play a big part in our overall financial situation.  Yet, most of us do not know exactly what the score actually represents or how it is calculated.  By having a good understanding of the our credit score, it becomes much easier to keep your score in the upper range, allowing you much more flexibility in the financial and credit options that are available to you.

Credit scores are based on a number of different factors. These include an individual’s past credit history, timeliness of paying their debt obligations, the total amount of debt that a person carries in relation to their income and the type of debt that is owed.  Your credit score represents a numeric expression of your creditworthiness.  A person’s credit score is a number that ranges somewhere between 300 and 850, with the higher numbers representing better creditworthiness. This score is what is used by lenders to determine the likelihood that you will be able to repay your debts. The system that is used in calculating credit scores is known as the FICO score.  The term FICO is the acronym for the Fair Isaac Corporation.  This is the company that provides the credit score model to various financial institutions.

Basically, your credit report shows potential lenders or creditors the history of your credit activity.  This activity is recorded by the major credit bureaus.  In many instances, your credit score can either be your best or worst asset or liability in obtaining the credit or loan that you are pursuing.

Know Your Credit Score
According to Fair Isaac Corporation, the median credit score in the United States is 720. This means that half of us score better than that, and half scores worst.  On the other hand, a credit score of 620 or below will be considered not good, and unfortunately, it may cause you to pay higher interest rates for loans because it is considered as a higher credit risk. It is estimated that more than (80%) of all financial institutions and other lenders use FICO scores as a part of making their lending decisions.  Therefore, having a good understanding of what your credit score is and how it is calculated should give you a good idea of whether or not you will be able to get a loan, as well as how much it may cost you.

Paying attention to what your credit score is at every point is critical to your credit health. Negative items in your credit report lowers your credit score and can make a huge difference in what you pay on home mortgages in additional payments….By having a higher credit score, you can essentially save thousands of dollars over the years. Therefore, it is essential to not only keep track of your credit score, but to take charge of the financial activity that will keep your score in the upper range.

What Makes Your Credit Score Rise and Fall
There are a number of factors that go into calculating your credit score.  The most important criteria in weighing your credit score is your payment history. This area makes up (35%) of the overall score.  If you pay your bills on time, you should score high in this category.  The second highest category in measuring your credit score is the amount of total debt that you owe. The amount you owe is based on what kind of debts you have, what proportion of your total credit limit is being used, and how much you owe overall. This counts for (30%) of your total FICO score.  The next category is length of credit which is worth (15%) percent of your total credit. The longer your credit history the better it is for your credit score. The next category is new credit which counts for (10%) of your credit score.  The amount of accounts you have opened which generated inquiries from creditors may be considered too much activity and that is a negative sign. The last but not least category is the type of credit that you use and this is worth (10%) percent of your overall credit score. In this category, FICO looks for how many different kinds of active credit accounts you have; for instance, a variety of different types of credit such as:  credit cards, mortgages and bank loans.

Once all of these factors are calculated, you are ranked with a credit score of somewhere between 300 and 850.  Typically, anything over 700 is considered to be a good score.  A credit score of 750 or over is considered to be excellent. On the other hand a credit score of 620 or below will be considered not good; unfortunately, it may cause you to pay higher interest rates for loans due to you being seen as a higher credit risk

When you apply for credit from the bank, department store or credit card companies, you fill out an application and that information is forwarded on to the credit bureaus along with constant updates on the status of your account. However, not all your creditors will report what they know about you to the credit bureaus and of these that do, not all report the entire contents of their files.  It is for this reason that it is essential for you to know what is contained in your credit report.

It is important to know that your actual credit score is not just one single number.  All three of the big national credit bureaus - Equifax, Experian, and Trans-Union have their own way of calculating your creditworthiness. In addition, creditors may report to all three of these bureaus or only to one.  Therefore, it is very important that you know how each of the credit bureaus has rated you in order to get a better overall picture of your credit report card.