Guidelines For Checking Your Credit File

Before you start reading this article here are some useful definitions. A credit check is a form of research carried out by a would-be loan company to determine your eligibility for borrowing. They will study your credit record to get a sense of your present and previous financial obligations. They can then assign you a credit score to see if the manner in which you handle your finances meets their conditions for credit.

Equifax is one of a number of important UK credit reference agencies. Equifax collects all your financial statistics from a range of places to come up with a report that shows your credit history - i.e. your credit report. In the event you fill out an application for any form of credit, lenders will check your credit file to get a picture of your financial history. You may request a copy of your report when ever you like so that you can know that everything is in order. The Equifax online site has a great deal of useful advice on how to make financial choices and safeguarding yourself from fraudulent practices.

A credit score or credit rating is a method that prospective lenders use for evaluating the credit suitability of a customer. They will examine the would-be client's credit report, the data within their credit application and the amount of borrowing requested. They will then use a numerical scoring process to establish the level of 'risk attached 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.

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

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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