What goes into a credit score

As discussed in the previous article lenders will check your history to see how you perform with credit and finance. But what is noted down in this file, what information is pertinent and what is not? Here we will give some details on notes and features likely to be within your historical file.

Bad Credit Notes – there will be several key features on your file that can mean you are noted as being a ‘bad credit’ applicant for your loan. These features can include:

Arrears – occurs when you have missed payments on a loan which are backed up and you have been unable to pay off or clear.

Defaults – occurs when you have not paid back a loan or line of credit such as store cards.

CCJ’s – these are County Court Judgements. It occurs when a lender has been unable to obtain payment from the borrower, despite having made some efforts to arrange or organise this. They will then take their case to the County Court where a judgement or ruling will be made as to whether the borrower should have to pay back, and if they do, how they will do so – their schedule of payment. Obviously in having to visit a court to arrange payment is no small thing for a loan company, so will be a significant mark in your credit history file.

Credit Applications – past applications for loans or general forms of finance / credit will be included in your file. Clearly if you applying for credit with many, many different institutions then there may be some form of problem that needs to be addressed and will be non-standard, thus alerting potential lenders and loan companies.

What should I do if I have a bad credit rating? -contact a specialist company on the best actions to take in order to ‘repair’ your history and thus have more success in future applications should you be turned down by the loan company.

So can I check my own credit history? - Can I see what the loan companies conducting checks can see?

Yes you can.

There are specialist companies that provide credit checks, conducting them both for companies and if you wish, for individuals. One such company is Equifax. Via their website you can obtain an online credit report from their specialist service to see what you loan provider will take into account when assessing you as a potential loan customer.