There are hundreds of reasons someone might want to get credit. Some people are struggling to meet their monthly bill requirements, whereas others want to upgrade their current property or finance a car.

What ever the reason for credit, one thing is for sure; lenders will be checking the individuals’ credit history to determine their financial stability and their track record for paying back cash. Credit reports have been used for years by lenders to determine who is suitable for credit and who is not. So what goes into your credit report?

Personal information

The first thing that lenders will see when they open a credit report is personal information, which acts as a quick personal profile of the borrower. This will include things such as name, address, date of birth and will also inform the lender if the individual is employed and if so; by whom.

History of credit

The next set of information is what the lender will be looking at in detail; the history of credit. This will include details of all outstanding and past credit history. For example, if the individual had a loan or credit card it will include information such as the type of loan or card, the limit or amount, the current status and the status of payments dating back 2 years in many cases. This will show if the individual has managed to pay back the loan or credit card on time.

Public records

Of course, the document is not limited to personal information and the history of credit relating to the individual. The individual will also have information relating to their records in public on file. These will include major penalties that they have received in the past. This includes things such as tax liens, CCJs (County Court Judgements) and even if they have filed for bankruptcy or not. This helps to get a rounded overview of the individual and their finances.

Enquiries for credit

Another thing to consider is the enquiry for credit. Essentially, this shows the information relating to different pieces of credit that the individual has tried to obtain over the last 12-24 months. Obviously, any repeated applying and denial of credit is not going to look good on a credit rating and this is what the lender will look for.

So how is credit history and information used?

The lender will use the overall profile of the individual to determine whether or not a loan or credit of any kind should be given to a particular individual. This will depend on age, employment status, address, public records and past inquiries for credit. All of these things will help to sway a decision one way or another, but they may also help to reduce or increase the interest rate that credit is offered. For instance a home owner currently in full time employment has security of income and property and therefore, it likely to get a better rate than a student that has a 16 hour per week working contract.

If you’ve had trouble getting credit before, knowing what goes into your credit report (and where it comes from) can mean the difference between getting credit and being declined.


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