Your Credit File: Your Debts What Now ?

The Credit Reference Agency.

The credit reference agencies do not make decisions about your application to a lender. They collate information on all of us, a lender will pay them for the information they hold. This is information on bank accounts, credit accounts, previous and current addresses, whether the applicant has court orders for debt or is known for late payment of bills such as regular payment and utility bills. Please note they are not informed what monies are in a bank account but should an account not be managed properly then this information is shown as unsatisfactory.

The Black List.

What black list? There isn't one. It is said that people are placed on a black list and therefor cannot get credit, this is not true. Where you live, your race or religion have nothing to do with whether you will accepted for credit in any way.

My House is Blacklisted.

A house is never blacklisted. Should a previous occupant have had financial difficulties this does not effect you in any way. Please take careful note here; Should a person living in the house be in financial difficulty it does not effect you. That is unless you have any joint accounts such as bank accounts, mortgage accounts, credit card and charge card accounts. If you do have any such financial connections, it means that you are named on the credit report supplied to the lender. Although your other commitments might be perfect, a lender will take into consideration your financial association to the person named with you on the loan or credit agreement.

I only earn a low income and cannot obtain credit.

If you earn a low income although you might have a clean credit background, it might be that you are considered a greater risk than someone earning a higher income. This would not usually stop you getting credit but the interest rate might be slightly higher, to cover a perceived risk. Lenders always look at how you have handled your finances in the past. Someone might have had a large loan in the past and be known as a bad payer. He will be turned down in the future. Another person might be on a low income with a smaller loan and be known as a good payer, he will be considered favourably in a future application.

Not having had previous credit will it matter.

If you have not had credit before it can effect your application for credit. Without a credit history a lender cannot judge you ability or attitude to repayments. You will need to build a credit profile. If you do not have a credit card you might ask your bank for one with a low spending limit, try and take out a store card perhaps. Please note I am not encouraging you to go into debt! but lenders like to see a repayment history. This also applies to someone who might have paid off credit and store cards, as well as clearing all outstanding commitments in the past.

A discharged bankrupt. Can I gain credit.

Whatever your financial past, the information will stay on your credit file for six (6) years. As a bankrupt or debtor no matter how quickly you might clear debts. Each debt will show for six years from the date of the court order. This does not mean that you will not get credit in the future. It does mean however you are an obvious risk, most lenders will refuse you, some will lend but at high interest rates. A bankrupt has to have been discharged from bankruptcy before making any application for credit.

Every application for credit will show on the credit file.

Be aware that every application for credit will show on your file whether you are successful or turned down. Should lenders see many applications for credit, it will indicate that you are being rejected elsewhere and it will appear that you are desperate for money. This is important When making an application for credit ask for a quotation search only, you might be genuinely shopping around for the best deal. This quote will not show on the file. You should be sure to tell the lender this.

Checking my own file will damage my status.

Be assured that checking your own status with a credit reference agency will not damage your credit rating. Remember that every application is taken on the merit of the applicant. Should you need advice the credit agencies will supply you with help and details. They will also supply you with your credit file for a small fee.

ALWAYS TAKE APPROPRIATE LEGAL ADVICE!