Credit Rating

Credit Rating In the UK what is your Score rate

A credit rating agency evaluates debt and repayment liability on businesses and consumers, applying a credit score to indicate the level of risk involved to potential lenders. The three agencies within the UK are Experian, Equifax and Callcredit who collect data from a variety of sources in order to provide a credit report upon which credit scores are worked out. Anybody who applies for a loan, credit card or mortgage from a financial institution will have their credit checked with one of these agencies to assess potential risk to the lender.

While credit rating agencies compile reports on commercial interests, by far most of their work is geared towards the individual consumer market. They gather their data from lenders who update the agencies on the repayment records of their customers, from the electoral roll, plus court records with regards to any county court judgements. The history of credit records this builds up allows the agencies to produce the credit report containing an individual’s credit score, showing their potential credit worthiness or otherwise to a lender.

Individuals can obtain a copy of their credit rating

At any time, and it is recommended to do so periodically, particularly if you are considering taking out credit. The agency report will highlight any issues in advance, such as late paying of bills, even a monthly mobile phone contract bill, which has affected your score, and give you a chance to begin to improve the rating by sorting your finances and budgeting to have any bills paid on time in the future. Checking your credit report is also a way to check against potential identity fraud, since you should be able to spot any transaction that you had not processed yourself.

Credit rating agencies are businesses

Selling the credit rating and reports they produce to the lenders. As the information on these reports can be vital in obtaining necessary funds, an individual can dispute any data they believe is inaccurate.

Comments are closed.