All About Loans Credit Scoring
Credit Scoring....
When you apply for a loan or any type of finance, it is most likely that the lender will apply some form of 'credit scoring 'algorythm' to your application.
This usually involves running a credit check on your credit file through one of the main credit reference agencies. Your credit file contains information about all your other credit liabilities such as credit cards, loans, mortgage and bank accounts, along with payment histories and facts and figures on any unpaid bills, defaults, arrears and County Court Judgements.
It all adds up
The interest rate you will be offered depends upon the amount of risk that the lender is willing to take. Because of this, different information gathered on the application form and from your credit file, is viewed as important by different lenders. A credit score works on a points accrual system, so the more points you notch up, the more likely you are to be 'creditworthy' in the eyes of the lender. However, while one particular lender my give you 10 points for owning your own home, another may give you no points at all. For example, an unsecured lender targeting tenants, would not expect many of it's target audience to have a mortgage!
Examples of factors taken into the credit score calculation are:-
- Residential status (Homeowner or Tenant)
- Time at address
- On electoral roll
- Marital Status
- Age
- No. of children
- Whether you have a landline telephone
- Employment status (employed or self-employed)
- Number of previous credit applications (this is very important)
Different lenders will have a different requirement for information and a different way of assesing it. It is normally a closely guarded secret and lenders are reluctant to tell you exactly why you may have failed their credit score.
One very important factor is the number of previous credit applications you have made. Each lender that you apply to will inevitably run a credit check on your credit file. Any credit search is recorded on your credit file and too many searches in a short space of time will count against you.
One way of avoiding accumulating lots of credit searches is to use a credit broker. A credit broker will asses your credit rating and likely credit score without having to do more than one or two searches on your file. As they usually have access to most of the main UK lenders, they will then be able to source the best loan available for you from all the 100's different loans available.
All About Loans is a secured loans broker that can do this for you. We will work for you in sourcing the best rate loan available to suit your circumstances and your requirements
or call us FREE on
0800 061 2197
(Homeowners Only - Tenants please use form)
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT
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