We are all familiar with the term ‘credit rating’ but how many actually know what it means. Each lender that offers some form of finance such as bank loans,creditcards,mobile phones and car credit will have their own cut off score at which they will decline applications. This can be related to how much credit you presently have taken up against your annual earnings such as number of credit cards or if you have more than one loan showing on your file. Also your credit rating can be effected if you have any accounts that you have made late payments on. Your credit file has a record of usually the last twelve months repayments on any accounts so any potential lender will be able to see straight away if you have any patterns with being late or missing monthly instalments.If you think of it as a system where any negative items such as late or missed payments will reduce your overall score then you can start to understand hlow a credit rating works.
The idea that there is such a thing as a credit rating blacklist is also an urban myth as no such system exists. What happens is that each individual finance company or lender will have a certain requirement for lending – a cut off point if this makes sense.So what one company has on their systems as a bad risk or below standard scoring another lender may well have one that is different. Remember the actual credit rating system that is used is designed to work out which applications will make the funder money as that is what its all about isn’t it? If they look at your application it may well be that due to previous defaults on other agreements it might make you appear to be a high risk candidate to lend to. In 2009 this has been effected also by the ‘credit crunch’ as banks and car finance companys tighten up their lending restrictions and so those who would normally have been approved without a problem are finding that they are being declined. Recently the lenders have also started to share further information that includes the amount that you repay on your credit card each month. This will allow them to see if you make a repayment in full or if the minimum payment is made instead.
With MSG leasing we operate on a Non status basis so the finance companies that we use will look at your credit rating but use your present situation to look at your credit worthyness rather than the past. This just means that they will look at your income and outgoings but wont judge you on your credit rating to make a decision. The items that we may require for some cases will simply be two months bank statements and proof of identity also.
