Your Credit Report
Traditional lenders (but not Guarantor Loans lenders) use their own criteria when deciding whether or not to lend you money, but they rely heavily on data supplied by credit reference agencies.
These
are commercial companies which compile information from a number of different sources, including the electoral roll, county court judgements and financial institutions. They sell this information to lenders and other service providers in the form of credit reports which help them to decide whether to grant an application for a loan, credit card, or provide another financial product. The three credit reference agencies operating in the UK are Experian, Equifax and Call Credit.
What Information is in my Credit Report?
The data held in on your credit file (and available for you to see on your credit report) is:
- Your name and date of birth
- Your electoral register details
- Credit payment history
- County Court Judgements against you (if any)
- Bankruptcy and administration orders against you (if any)
- House repossessions
Credit reports do not include information about savings accounts or personal information such as religion, political affiliation, medical history, or criminal records. The information on your credit report is used by the lender to generate a credit score, but this score is not part of the report itself.
What do Lenders do with my Credit Report Information?
Lenders combine this credit information with information about your income, employment status and assets to assess how you have handled credit in the past and to decide how much of a risk you are. This is "credit scoring".
You may also struggle to borrow money if you have never taken out credit before, or if you already have what the lender believes to be too many loans or credit cards. There is no "blacklist" of people who will not be given credit - each lender analyses the information according to its own rules, so you may be turned down by one company but accepted by another.
However, beware of making multiple applications, because many lenders take a negative view of a large number of credit searches in a short period.
If you have a poor credit history or no credit history you should note that the successful repayment of a guarantor loan (amongst others) will serve to improve your credit status (as reflected in your credit report) in the eyes of other lenders - so in the future it should be easier to obtain credit.
Checking Your Credit Report
There are 2 good reasons why you should check your credit report:
- Incorrect information could harm your chance of obtaining credit.
- There may be evidence of identity fraud against you - i.e. people trying to obtain credit using your personal details and for which you might become liable.
|
 |
It makes great sense to occasionally check your credit report - they can be obtained for £2 from any of the three credit agencies mentioned above, but it could also make sense to sign up for a more proactive service which gives you regular updates and alerts automatically - Solution Loans works with Experian to provide this credit report service.
|
