Credit Rating

Your personal credit score plays an important part in securing new loans and credit, and can affect your financial life for better or worse. Lenders use the information in your credit file to determine whether you present a high risk of default, and if your credit score is low, you may find it difficult to obtain a mortgage or other loan.

Your credit file is an important source of information for lenders and other financial institutions, and a bad credit rating can affect your life in a number of ways. Given that a default remains on your credit record for six years, it’s also a long-term issue.

The Rental Exchange scheme is a new initiative which allows tenants to have their monthly rental payment recorded on their credit file.

If your credit score has been affected by problem debt, you may be looking for ways to start rebuilding it and getting on with your financial future.

Knowing your credit score and keeping a regular eye on your credit file can prove incredibly beneficial if you wish to apply for a mortgage, credit card, loan or other type of credit. By checking your credit file you can identify any errors that could be standing in the way of you accessing the best deals.

A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer.

The introduction of Universal Credit was intended to simplify the benefits system and reduce the opportunity for fraud, but it has received much criticism, partly due to an inherent lack of flexibility.

When you look at your credit report, you’ll see various status codes marked against individual loans and other borrowing. These indicate the extent to which you’ve repaid your creditors, whether there were any defaults, and if the account has now been closed.

If you’re worried about the effect that your debt might have on the people you live with, it’s worth knowing that credit files are independent of each other unless there is, or has been in the past, a specific financial link such as a joint loan.

If you are currently working on reducing the amount of debt you have, improving your credit score may not be at the top of your agenda.

When lenders decide whether or not to offer you a loan, it is the information held on your credit file that forms the basis of their decision. This information also helps to combat fraud, as your identity can be verified if you are on the electoral role.

It is possible to get a mortgage with a bad credit rating, even if you have previously been declared bankrupt. Mortgage loans for bad credit borrowers do exist – you may just need to look a little harder for a specialist mortgage lender for bad credit.