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Simple Guidelines For Credit Check Agencies

By: James Miller

A credit check is a kind of search carried out by a prospective loan company to evaluate your eligibility for lending. Lenders will examine your credit file to become familiar with your current and earlier financial history. Lenders can then award you a credit score to check if the way that you handle your finances satisfies their requirements for borrowing.

A credit record is actually a written record of what credit you have accessed as far back as the past six years. It indicates the amounts of money you have taken out and if you have ignored any instalments etc. A credit record gives opportunity for would-be loan providers to investigate your financial past so that they will be able to choose whether to let you borrow from them. The data on your file is gathered by credit reference agencies such as Experian and Equifax. They use information from public reports (e.g. the electoral roll, CCJ's or County Court Judgments etc) and from loan companies as well as financial institutions: e.g. credit applications, credit accounts.

A credit score is a technique that would-be lenders use for determining the credit suitability of an applicant. Lenders will look at the prospective client's credit file, the information on their application and the level of loan required Lenders will then employ a mathematical scoring equation to determine the amount of 'risk' associated with lending to the potential customer.

A credit reference agency holds details of your personal credit information, such as credit cards, loans, etc including details of any defaults in payments, county court judgments (CCJs) etc.

Details of defaults and CCJs are kept on your file for six years and can affect you getting further credit.

These agencies - the major companies being Experian, Equifax and Callcredit plc - provide this information so that a lender can decide whether or not they will lend you money.

When applying for credit, you will be asked by the lender for your consent to check your credit file. This allows them to see a number of things - such as you are who you say you are; confirmation of where you live (your file should show you listed on the electoral roll); how much your current commitments are; how reliable you are at making payments on time etc.

Having looked at this information, the lender will then make a decision as to whether they will lend you money. If you are refused credit, it is not because you are on a 'blacklist', it will be down to you not meeting the lender's criteria.

The criteria - which varies from lender to lender - is based on your financial profile being 'Credit scored' and apart from your credit history, a lender will take in to account your occupation, your age, whether you are a homeowner etc.

If you are considering getting credit, it is worth contacting one of the credit reference agencies to see a copy of your report. You can then check that all the information on it is correct such as you being on the electoral roll, for example. The cost to see your file will be upwards of �2.

Contact Experian, Equifax or Callcredit plc for more information.

Experian is a major credit referencing agencies in the UK. Loan companies will refer to credit referencing agencies to consider the qualifications of an applicant derived from their financial history. This is considered a credit file. As with every consumer, you might obtain a copy of your credit report from Experian so that you can check that all the statistics on it are proper and that your details haven't been used in a fraudulent manner.

Equifax is a major credit referencing agencies in the UK. Equifax collects all your financial statistics from various places to create a file that shows your personal financial history - i.e. your credit file. Should you request for any sort of credit, lenders will look at your credit report to understand your credit history. You may obtain a copy of your credit file at any point so that you can check that everything is correct. The Equifax online website has lots of practical suggestions on making sensible financial choices and safeguarding yourself from fraud.

Article Source: http://www.articlebankonline.com

James Miller is a very prolific writer with lots of useful and interesting articles on several issues of interest including secured loan best rates, bad debt remortgages and other, relevant to loan for tenants.

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