When you apply for finance to buy a car, furniture, mobile phone, credit card or anywhere you fill out a credit application. The company will check your credit score with one of the credit reference agencies, such as Experian or Equifax. Your credit score is determined by points based system which is calculated on your known credit history, voters roll listing and the information you supply. If you have a low credit score, you may consistently get turned down for finance.
A credit reference agency such as Experian or Equifax hold credit information on most adults in the UK. When you make a finance application, you will normally given the lender permission to carry out a credit check on your behalf and also allow them to record the information with a credit reference agency. The lender will access your file from a credit reference agency. Some lenders will use Experian or Equifax, some will use both. A credit reference agency doesn’t decide if you are approved or declined. The lender will use the information to assist in the decision process. The lender will use their own guide lines to decide. The information credit reference agencies hold includes voters roll history, County Court Judgments, commonly known as CCJ’s, defaults, bankruptcy, past and current credit commitments and previous searches.
Lenders can only carry out a credit search on people not properties. There is no such thing as a credit black list. Your credit file is personal to you and is based on your information. Such as how you have conducted your current and previous credit commitments. The information also includes your middle name and date of birth.
Only if you have joint agreements, such as a loan, bank account or mortgage in joint names. If you are a guarantor on a credit agreement your credit history may be linked to the person you have signed as a guarantor for. Otherwise if you aren’t linked financially your credit rating will not affect theirs.
Beware of any company promising to repair your credit rating or removing bad credit such as CCJ’s and defaults from your credit file for a fee. Only incorrect information can be removed from your credit file and if you write to the credit reference agency they will remove any incorrect information free of charge. If the adverse information on your credit file is correct but you feel it needs an explanation, the credit reference agency will help you place a “Notice of Correction” on your credit file, again they will do this free of charge.
It doesn’t take a lot to get a bad credit history which will lead to a poor credit score. Things that could affect your score include
You should check your credit file. You can do so by obtaining your free credit report from CreditExpert. This will indicate what information Experian has on your file. If the information is incorrect you can ask to have it removed. You can start to rebuild your credit rating by paying any further credit you take out on the due date. The best way to do this is to pay by Direct Debit, ensuring you have enough funds in your account to meet your commitments. Make sure you are registered on the electoral roll. You can do this by ringing your local council.
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