Home About Us Debt Advice Uk Debit Card Tips Bankruptcy Contact Us
Credit Rating in UK
Credit rating is the process of estimating the credit worthiness of a person and can be extended to that of businesses or even nations. There are organizations that collect financial information of people for credit rating. These are popularly known as credit bureaus in many parts of the world. In UK the process is done by credit reference agencies. These agencies process the credit score of people, which in other terms is the potential borrower’s ability to repay debt, and sell the information to lenders for evaluation before approval of the loan. The report provided by the credit reference agencies is termed as credit report.
Today almost every lender uses this credit report to evaluate the borrower’s financial capabilities in repaying the loan. It has become essential that a person should have a good credit score in order to avail any financial help from creditors or even to obtain credit cards and loans from banks.
The credit reference agencies hold almost every one of your financial records along with your personal details, such as name, date of birth, current and recent addresses, place of employment etc. They collect the necessary information from various sources like electoral roll, CCJs, banks, and other financial institutions. However, credit reference agencies do not collect information about your savings accounts or personal information such as religion, political affiliation, medical history, or criminal records.
In UK there are three major credit reference agencies namely Experian, Equifax, and Call Credit that provide credit reports to lenders for a fee. These credit reference agencies analyze various data, such as credit payment history, county court judgments, bankruptcy and administration orders, house repossessions, etc. to create your credit report. The credit report provided by these agencies include your credit history i.e. details of your credit accounts, such as the date of opening, credit limit, loans you have received, missed payments, and dues. Even after you settle your loans, you can find these details in your credit report for a period of six years.
Lenders apart for collecting required information from you also check your credit score with these credit reference agencies to learn how prompt you were in repaying your debts in the past. This gives them a sense of security and helps them determine the level of risk they could take by the way of lending you their money. There are two possibilities where your credit report can not help you obtaining a loan from the lender. First if your name is not in the electoral roll and secondly if had never taken out credit in your life. This is why it becomes essential to create a good credit report in order to avail financial assistance in the future. As of now there are lenders that do not consider credit reports as a norm but it is soon expected that credit reports will become one of the primary source of references for any financial obligation in the future.
Every time you apply for a credit and if the lender searches your credit report with the agencies these also get recorded in your report and remain intact for two years. Thus applying for financial help or loan with many companies within a short period will create a negative impact on your Card Limits and may mislead the lenders, as if your requests have been turned down. It is wise to check your credit reports at least once a year. You obtain a copy of your Statutory Credit Report by paying a fee of £2. You can also correct any mistakes or inaccuracies in your credit report by citing the creditor’s documents. Maintaining clean credit reports will be highly advantageous during times of financial needs and Airline Miles Credit Card

compare credit cards online

Home | About us | Resources | Debt Advice Uk | Debit Card Tips |Bankruptcy | Contact Us
Copyright © 2009-2010 by Debtconsolidationguides.co.uk All rights reserved