They Will Check Out Your Credit File To Understand Your Ongoing And Past Financial Obligations

Category: Finance, Credit.

Before you start reading this article here is a range of practical definitions.

It indicates how much money you have taken out and whether you have neglected any repayments etc. A credit record is basically a documented history of whatever credit you have had in the past six years. A credit record provides a way for potential lenders to search through your credit history in order for them to determine whether to grant you a loan. They utilise statistics from public sources( e. g. information from the electoral roll, court judgments etc) and from loan providers as well as financial institutions: e. g. credit accounts, credit applications. The facts and figures on your file is collected by credit reference agencies for instance, Experian and Equifax. A credit check is an type of search executed by a prospective loan company to determine how suitable you are for credit.

They can then award you a credit rating to check whether the fashion in which you handle you financial matters fulfils their conditions for being granted credit. They will check out your credit file to understand your ongoing and past financial obligations. A credit score or credit rating is a tool that prospective lenders use for figuring out the credit suitability of a customer. They will then make use of a numerical rating system to assess the level of risk connected to lending to the applicant. They will check the potential customer s credit file, the facts and figures on their application and the level of loan requested. Even if your credit score is good, it is important that you keep it that way- or even improve it!

Building and maintaining a good credit rating doesn t happen overnight, so you cannot instantly repair or improve it. The better your credit score, the more choice of credit options will be available to you- and normally with a better interest rate, too. However, follow the tips below and over time you should see that your credit rating has improved: First and foremost, make sure that all your payments are made on time. Keep the outstanding balance on your debts low. If for any reason you miss a payment, make sure that you pay it as soon as possible- definitely no later than a month overdue. A high outstanding balance could negatively affect your credit rating, even if your record is otherwise clean .

Make sure that all the information on it is up to date and contact the relevant company if you see any errors. Check out your credit report regularly( the major credit reference agencies are Equifax, Experian and CallCredit plc) . Check that you are on the Electoral Roll- this is proof of where you live to potential creditors and if you aren t on there, It will have a negative affect on your rating. If you are suddenly unable to meet the repayments on your debts due to unemployment, illness or family issues, then call your creditors straight away. Check with your local council. They will be sympathetic and should be able to work a repayment schedule.

Also try contacting one of the free advice centres available for people in financial trouble such as the Citizens Advice Bureau or the Consumer Credit Counselling Service( CCCS) .