All lenders use credit checks these days to help them decide whether you should be accepted for a loan so it is important to understand in detail how credit reports work, what your credit file will look like, and what you can do to make sure you have as high a score as possible. In this article we will look at how your credit report is made up and what information it contains and next time we will give you some advice to make sure your credit score is as high as it can be, and what you can do to rebuild your credit history if you have had problems in the past that have affected your ability to borrow.
As well as containing all of your basic information like your name, date of birth, current and previous addresses and a note of whether you are listed on the Electoral Register, your Credit Report contains lots of information about your credit history, and the way you have managed your money in the past. It will have details of all your bank accounts, credit cards and existing and past loans.
It will detail whether you have kept up with payments on these loans and will show late or missed payments.
These details of late or missed payments could stay on your report for up to six years, as will details of any county court judgements and bankruptcies.
Your credit report will also contain details of the way you manage bills such as mobile phone contracts and utility bills, and whether you have kept them up to date. It will show details of anyone else that you have been involved with in joint credit applications.
A lot has been written about the problems that can be caused if you make multiple credit applications, and whether this is likely to damage your ability to get credit. It is true that other lenders that have searched your file when you have previously applied for credit will be noted on your report, but this doesn’t necessarily mean that multiple applications will do you a great deal of harm. Unless they have all been unsuccessful, which would suggest there is something more major going on with your history.
Each lender that you apply to will read the information contained in your credit report in a different way so just because you have been rejected by one lender doesn’t mean you will be rejected by others.