Points to Consider About Lender Credit Score
Before you begin reading this article here are some useful definitions. A default is the financial term to describe when you've not complied with your financial responsibilities. In the event you have skipped your payment on a mail in account, for example, they could place a Notice of Default on your credit record. This will not look good on your file in the future should you wish to apply for further credit.
A 'CCJ' refers to County Court Judgement. This refers to a judgement decreed by a County Court against someone who is in debt to a third party (another person or business) or where they have not complied with the stipulations of a credit arrangement. This judgement will present a reasonable pay back strategy in order that the indebted person can repay their debt. These judgements are registered on official public record and will have an impact on the debtor's likelihood of securing further credit for the next six years.
Equifax is a major UK credit reference agencies. Equifax gathers all your financial information from a number of sources to create a file that presents your personal financial history - i.e. your credit file. When you apply for any credit, lenders will check your credit report to know about your credit record. You can request a duplicate of your file at any point in order to confirm that everything is right. The Equifax internet site offers lots of practical information on how to make financial decisions and guarding yourself from scams.
A Credit Score is something used by loan, mortgage and credit companies to decide whether you qualify for a particular product. A Credit Score looks at your current and past financial history, plus other personal details, and using mathematics, analyses what type of 'risk' you are.
By 'risk' we mean whether it is likely you'll pay back the money borrowed; whether you can really afford the repayments etc.
Factors that can affect your score include:
1. late or missed payments in the past
2. County Court Judgements and arrears
3. How much you currently owe - even if all your payments are up to date
4. You not being on the electoral roll
5. Applying for lots of new credit accounts - this is viewed that you are someone getting into financial trouble
6. The length of your credit history
7. Financial associations - other people listed on your credit file that have bad debts can affect your credit rating
Why Your Score Matters
Your Credit Scores matters because it is probably the most influential factor used by loan companies in deciding whether they will give you a loan/mortgage/other credit.
However, it is the lender who makes the final decision and they may well take in to account reasons for past credit problems. Apart from checking out your financial history, they will also need to look at your occupation; whether you have any equity in your mortgage, your income and savings etc.
James Miller is a prolific writer who has taken the time to write very helpful and helpful articles on many subjects for instance emergency loans with bad credit and other topics in some way relevant to car loan redemption and high performance car insurance.
Source: http://articlesbase.com/credit-articles/points-to-consider-a~.html
Added: January 31, 2008
