Poor Credit Advice
Do you know what information is held
by Credit Reference Agencies in your file?
When planning a major purchase, such as moving home or buying a
car on higher purchase, being refused credit can be frustrating
and inconvenient. Before accepting any credit agreement you may
have applied for, the lender will first check with a credit reference
agency to decide if you’re creditworthy. Any late payments,
County Court Judgements or defaults registered in your file could
result in your application being declined.
Most banks, mobile phone, and mail-order companies supply credit
information about their customers to credit reference agencies.
They’ll let them know, for example, if you’ve made payments
on time, and how much you owe. You will also have details from the
electoral roll, which is used to confirm your address and personal
information as well as any County Court Judgements or bankruptcies
you may have against your name. Any previous searches made by other
lenders you have applied to will also show up in your credit file.
The financial information will remain on your file for 6 years after
the account has been closed, and credit searches will stay on your
file for up to two years, depending on the Credit Reference Agency
After a lender has looked into an applicants file, they will then
use a credit scoring system to decide the risk involved in lending.
The scoring system takes into account factors like income, debts
and previous payments. Some lenders use different systems, so you
may be accepted by one lender and rejected by another, even though
they have seen the same file. However, because any previous searches
are registered on your credit file, and a lot of searches in a short
space of time could count against you, it is important to apply
to lenders who you stand a good chance of being accepted by.
Callcredit, Equifax and Experian are the three Credit Reference
Agencies operating in the UK. By sending £2 to each CRA with
your full name, date of birth and addresses for the last six years,
you can receive a copy of your credit record – although it
is now possible to find out this information online.
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