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Before you start reading this article here is a number of useful definitions. A credit check is a kind of search performed by a possible loan company to gauge your suitability for borrowing. Lenders will examine your credit file to understand your current and previous credit history. Lenders can then assign you a credit rating to check if the manner in which you control your financial affairs meets their criteria for being granted credit. Equifax is one of the significant UK credit reference agencies. Equifax gathers all your credit facts and figures from various places to form a file that indicates your personal credit history - i.e. your credit report. In the event you apply for any sort of credit, lenders will study your credit report to get a picture of your financial past. You may apply for a printed copy of your report anytime you like so as to check that everything is in order. The Equifax online site has a great deal of practical advice on making proper financial decisions and protecting yourself from fraudulent schemes. A Credit Score (Credit Rating) is a method that would-be lenders use for calculating the credit eligibility of a borrower. Lenders will look at the applicant's credit file, the statistics on their application and the actual borrowing requested. Lenders will then utilise a numerical scoring equation to guage the size of 'risk' connected to lending to the would-be borrower. When you apply for any sort of credit, whether it is a credit or store card, a loan or a mortgage for example, you will undergo a credit check by the company who you are approaching for credit. A credit check is a way for a financial organisation to view your past and current financial history, including whether you service your debts on time; are late with payments; or have missed payments. A credit check also shows other outstanding debts and any records of County Court Judgements (CCJ's) and other defaults. This then gives the company a picture of what sort of financial risk you will be if they decide to lend you money - and what their chances are of them getting the money back! After all, no one wants to lend money to someone who pays it back late or not at all! This process is called credit scoring. There are several bodies who hold this information about you - the most widely known are Experian and Equifax. If you are considering taking out credit, get a copy of your credit file first. This means that you can check that all the data on it is correct and query anything that looks wrong. For example, even just one bit of wrong information - say your file shows an outstanding debt that has been settled - could mean the difference between getting approved for a loan or mortgage - or not. To get a copy of your credit file you will need to contact one of the credit record agencies. You will be charged a small fee (around �3) and a copy will be sent to you for your perusal. Check that your credit file shows you on the electoral roll - if not, this will have a negative effect on your credit score. And financial associations - where maybe someone who has lived with you or has lived at your address previously has a poor credit rating - will affect your ability to get credit. If you find information that is incorrect on your file, contact in writing the company who has listed incorrect data about you and send a copy to the credit record agency too. If there is a financial association listed on your record that is not applicable, contact the credit record agency in writing. They will send you forms to complete so that the association can be removed from your file.
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James Miller is a very prolific writer with plenty of useful and interesting articles on many issues of interest including guaranteed loans, best unsecured loan and other, related to personal loan affordability.
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