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From whom do your Creditors get your Credit Report?

credit report

Your credit history is very important information especially when you go for a loan or mortgage. In fact, certain job positions also require you to show your credit report. Now, you don’t need to keep any such file with you or show it when Search for credit reference agencies in uk. In case you’re wondering why there are some independent organizations called credit reference agencies that are there to maintain your credit information. They keep your file ready and updated in case anyone demands to have a look at them. 

So, there’s all the information about the money you borrowed and repaid in their file. You yourself can check on it and might need to have some information updated in case it isn’t. It is very important to keep your credit score in good shape, otherwise, you’ll have trouble borrowing any money. In addition to this, there is some other information that you must have. Read to know more about the credit reference agencies in uk.

How many credit reference agencies are there in the uk

Credit Reference Agencies in UK collect and store the information that is used to decide your credit score. The information they hold can affect your chances of being accepted for credit – from a loan or credit card, to a mobile phone contract. A credit report contains all the information held on an individual at their address(es) by the Credit Reference Agency. Lenders use the information it contains to decide whether to give you credit.

What information does your Credit File contain?

There are quite a lot of things related to your financial activity that one can know from your credit history. It contains everything about your credit accounts, including the ones that you used to have in the past. 

This file contains the information about the debts you’ve paid, whether you’ve been able to do that on time, and those that remain unpaid. That’s why it comes as a great help for a lender in deciding whether they should give you a loan. It helps them to know how you’ve dealt with previous debts, which is very important for calculating your credit rating. 

Credit reference agencies even have the information on your tax arrears except those that you owe to your local council. In addition to that, it also contains information about all your addresses for the last six years. You are required to update this information by contacting the agency if you move to a new place. 

So, when a debt collector or bailiff needs to visit you, they can know where you live just by looking at your credit file. Not only that, the organizations or people you have had a financial relationship with are also listed in it. This is important information for debt collectors, as well as money lenders. Moreover, if you have faced any county court judgments or fines, they will be mentioned as well.

How do Lenders Calculate your Credit Rating?

After they get your loan application, lenders will surely look into your credit file. The ones who don’t are basically not following the official guidelines, and you must stay away from them. To calculate your credit rating, lenders will especially look into the record of your credit activities. This is because the information on how you’ve dealt with past debts is the most relevant to them. 

Based on this and a few other pieces of information, they give you points. Now, there are some things, take bankruptcy for example, which can damage your credit ratings for obvious reasons. The lower the score is, the harder it will get for you to borrow money at good interest rates.

Which are the things that can be damaging to your Credit Score?

To be able to keep your credit score in good shape, it is important that you know the things that can affect them. That would surely make it much easier for you to prevent any kind of difficulty in getting loans. Here are the most common things that affect your credit score negatively:

  • Late debt repayments

If you have repaid your past debts on a date that is later than the time limit, it will show in your credit file. Even though it won’t affect the rating. You can surely lose at least some amount of points if you have this in your credit history. Though as a kind of defence, you can point out to the lender that you at least repaid the amount in full.

  • Debts settled by paying lump sums

When a lender gives you a loan, they would want to be repaid in the full amount you owe them, including interest. If they see that you have settled one or more past debts by paying a partial amount, it’ll probably create a negative impression.

  • Individual Voluntary Arrangement

An IVA stays in your file for 6 years after you get it. However, it doesn’t damage as much as bankruptcy does to your credit rating. On the positive side, it can be seen as a sign of commitment to paying your creditors.

  • Bankruptcy

If you have been bankrupt, it stays on your file for 6 years. Even after it has been removed, you’ll have to mention it, if the lender asks about it. You’ll have to explain to them that your financial condition has improved a lot than it was back then. Even then, you might face difficulty in getting a loan at good rates. So, bankruptcy should be avoided at all costs.

Can Anyone Peek into your Credit History?

The credit file of a person is not meant for everyone to view. It is only required to be shown in some cases, such as when applying for a loan, where that’s a requirement. Moreover, credit reference agencies let someone view your credit file only with your permission. So, your family, friends, or relatives can’t have a look at it if you don’t want them to.

What is the way-out when your Loan Application gets Rejected?

All lenders don’t have the same method to calculate your rating. So, even if you get rejected by one of them, the others won’t necessarily back off. It advisable that you check the minimum requirements that a lender has before applying to them. Some of them use computers to calculate your credit score. 

If your application gets rejected in that way, you can try requesting them to consider your credit file. Your information is available to not only one, but multiple reference agencies. The data each of them have about you might differ.

How do you View your own Credit History?

Among other reasons, it’s important for you to keep an eye on your credit file to protect it from fraudsters. You can either view it online or ask the agency to send you a copy of it. In the second case, you’ll be required to fill a form that you can find on the website of the reference agency. After that, they’ll send it to you by post, generally within a weeks’ time. Sometimes, you might have to provide your identity proof and your address, in case you have moved to a new residence recently.

What to do if Credit Fraudsters Target you?

It is not as uncommon as you might think for people to fall victim to credit frauds. That’s why you are advised to keep an eye on your file regularly. When you find any irregularity, you must inform the reference agency immediately. They will let your creditors and the other agencies know about it in turn. If you need any advice on protection from credit fraud, they can help you with that as well.

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