This is a factor that many UK customers come across but what does it actually mean? Well most UK lenders will check your personal details against those held by the main credit reference agencies such as Equifax and Experian to look for any bad credit. They hold data on every UK citizen who has ever had any form of credit – this can range from a mobile telephone,bank loan,car finance or current bank account.The information held on record will usually cover the last 12 months period and instantly highlights any instances where you might have missed or made a late payment on any of your currently running or expired credit agreements – this can be seen as bad credit and contributes greatly to a low credit score. Each lender will use this info in their own way to make up a risk score against your application. A good way to describe this would be to imagin that everyone starts on a score of a thousand and will loose points for showing certain behaviour or traits on their credit file – any bad credit will obviously reduce the total credit score. This can include the obvious missed payments or general slow payment history on accounts with each instance over the last year causing a reduction in points. The finance company will also look at your present borrowing level and will give you a grade for how much you already owe on credit cards,loans,mortgages and other credit.If you have lots of existing credit then this will also go some way to reducing your actual credit score too.
Another important part of building up your profile and often an area that leads to a low credit score is your address history. The lender will tend to prefer to give money to someone who has been at the same address for some time as this shows security and that they would be able to contact or get in touch with you and that you aren’t going to run off owing them monies.They also like to see if you own your own home too as this shows that you are settled at you address and not likely to suddenly move in a hurry.For non home owners this isn’t necessarily a problem but they will like to be able to trace you at all of your previous addresses – usually by checking the votors roll. A low credit score can be caused sometimes by simply not being registered to vote and many high street funders will give you an instant decline for that reason alone.If you are a renter and have moved every six months this can sometimes flag up as a potential fraud behaviour pattern and they would need to satisfy themselves that nothing underhand was taking place. Obvously if you were on the votors roll and you had updated the finance companys you dealt with like your bank each time you moved then it should all be documented.
Some of the main factors in having a low credit score from bad credit are the instances where you might have found repayment over a longer period a difficulty. If for instance you happen to be late making an installment three months in a row then a note will be placed on your credit file called a default notice. This will stay on record for three years time and can have a considerable effect in reducing you total score. Another major one that we come across is the County court Judgement or CCJ which again will be on file for 6 months time. This is usually the next stage after a default if the account is in arrears as the lender may take you to court to have the amount owed put infront of the county court. This usually means that your finance agreement has been terminated and you will then have to make suitable arrangements to repay the outstanding balance via the court. This will also show as being unpaid on your credit score until it has been paid in full or satisfied. Once it has been settled then it will be 6 years until it is removed causing long term damage and resulting in a low credit score.One of the major factors that you may have on your file that causes a low credit score will be Bankruptcy. This is something that will stay on record for 6 years but after one year you will be a discharged bankrupt so we will be able to fund a vehicle for you no problem.
