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More About Checking Your Credit Record
To completely understand this article, here is a range of definitions of common terms you might come across. A credit check is an investigation performed by a potential loan company to measure how eligible you are for borrowing. Loan companies will study your credit report to become familiar with your present and past financial commitments. Loan companies can then assign you a credit score to identify if the manner in which you run your money matters meets their requisites for borrowing.
Equifax is one of the major UK credit reference agencies. Equifax pulls together all your financial statistics from different sources to form a report that reveals your personal credit history - i.e. your credit file. When you fill out an application for any kind of credit, loan providers will investigate your file to get a picture of your credit history. You could ask for a printed copy of your credit report at any time so that you can see that everything is right. The Equifax internet website has plenty of useful information on how to make financial decisions and safeguarding yourself from scams.
A credit score is an approach that possible loan providers use for evaluating the credit eligibility of a borrower. Loan companies will research the applicant's credit report, the statistics on their application and the level of borrowing requested. Loan companies will then apply a mathematical scoring process to assess the amount of 'risk' associated with lending to the potential customer.
When you apply for any sort of credit, whether it is a credit or store card, a loan or a mortgage for example, you will undergo a credit check by the company who you are approaching for credit.
A credit check is a way for a financial organisation to view your past and current financial history, including whether you service your debts on time; are late with payments; or have missed payments. A credit check also shows other outstanding debts and any records of County Court Judgements (CCJ's) and other defaults.
This then gives the company a
picture of what sort of financial risk you will be if they decide to lend you money - and what their chances are of them getting the money back! After all, no one wants to lend money to someone who pays it back late or not at all! This process is called credit scoring.
There are several bodies who hold this information about you - the most widely known are Experian and Equifax.
If you are considering taking out credit, get a copy of your credit file first. This means that you can check that all the data on it is correct and query anything that looks wrong. For example, even just one bit of wrong information - say your file shows an outstanding debt that has been settled - could mean the difference between getting approved for a loan or mortgage - or not.
To get a copy of your credit file you will need to contact one of the credit record agencies. You will be charged a small fee (around �3) and a copy will be sent to you for your perusal.
Check that your credit file shows you on the electoral roll - if not, this will have a negative effect on your credit score. And financial associations - where maybe someone who has lived with you or has lived at your address previously has a poor credit rating - will affect your ability to get credit.
If you find information that is incorrect on your file, contact in writing the company who has listed incorrect data about you and send a copy to the credit record agency too.
If there is a financial association listed on your record that is not applicable, contact the credit record agency in writing. They will send you forms to complete so that the association can be removed from your file.
James Miller is a very prolific writer with plenty of useful and interesting articles on many issues of interest including guaranteed loans, best unsecured loan and other, related to personal loan affordability.
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