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Each Credit Reference Agency will have collected relevant information on you over the preceding years, especially everything related to your identity and your current and previous financial credit arrangements and borrowing activities, including how you have repaid your loans, mortgage and credit cards etc.
This information is called a Credit Report and each agency will compile one on you.
CREDIT REFERENCE AGENCIES PROVIDE CREDIT CHECKS TO LENDERS
Any credit reference agency, which receives a request for a credit check from a lending institution, will supply a copy of this credit file to the institution.
Your potential lender will then carefully check your details to determine your actual credit history and to confirm that what you have put on your loan or credit application form is in fact correct.
A lending institution will use a type of points scoring system to work out your Credit Score from the data in your credit report and on what you have put on your application form.
This score enables the lender to determine the level of risk to them, if they were to provide you with what you applied for.
A CREDIT CHECK WILL DETERMINE IF YOU CAN BORROW OR GET CREDIT
If you have a good record in your borrowing activities and have never had any problems making your credit card payments or paying your loan or mortgage repayments on time, and you also have a comfortable financial future then your are much more likely to get a high points total.
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A High Credit Score would mean that you have a Good Credit Rating and your credit or loan application would most likely be successful.
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A worse record of the management of your credit agreements, where you may have failed to repay loans by the agreed deadline or where your credit card or mortgage repayments have been late or got into arrears, would undoubtedly mean that your credit score would be lower.
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A Low Credit Score would mean that you have poor credit and therefore a Bad Credit Rating and your application could easily be turned down.
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Any loan or credit provided to you would be considered a high risk by a your lender and if a loan or mortgage were actually offered to you it would certainly be at a higher interest rate and would therefore cost you more.
These are the main reason why it makes total sense to check your credit reports with all agencies and fix any problems you find with them so that you can make sure that you will not be turned down when applying for any form of credit and that you always get the best (ie cheapest) deal!
Do your own Credit Check online with your Free Credit Report - it's easy...
See What Lenders See!
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