Anyone that applies for a credit card, a loan, or a tenancy on a property these days will most likely be asked by the lender, the agent or a landlord to have a credit check carried out before the application is accepted.
The idea is to verify that the individual applicant is a trustworthy person who is likely to pay bills or rent on time.
The credit report file (or credit history file) on an individual begins on the day he or she first opens a bank or building society account. It records every loan and credit card she applied for, every late payment made, every loan she is still paying off, and every credit check carried out on her.
Most of the information on an individual's credit history report, therefore, comes from the companies that have been dealt with on credit, such as banks, credit card and finance companies.
But, the file also contains publicly available information such as the applicant's address, how long in residence, and any county court judgements (CCJs) or bankruptcies.
Individuals have every right to check their credit files. If it is believed that information obtained for a credit check is incorrect, individuals may file a statement explaining why.
There is no obligation on the landlord who carries out a check to divulge the details obtained, in fact they will be advised not to do so by the credit reference agency, but they should be willing to give the main reason for rejection - e.g., a low credit score.
Inaccurate information can be removed from an individual's credit file, so whether you are a tenant or a landlord it's well worth checking your own file from time to time, but nobody can have accurate information removed from a record.
In this part of the credit check process the applicant completes an in depth application form which also seeks permission to carry out the checks. The form asks for personal history details about such things as employment status, address, current bank accounts and credit cards, current income, previous landlords etc.
The credit reference agency will give the landlord or his agent a score based on the answers and the details on the applicant's credit report file. The information obtained is referenced to a pre-determined points system, giving marks for each answer. If the score is above the minimum limit set by the system, then the applicant qualifies for the loan or the tenancy.
There's no guarantee, but the answer is sometimes yes!
Unfortunately, due to the statistically increased risk lenders will often ask for a higher rates of interest on the loan.
In the case of a tenancy, the landlord or his agent may request a guarantor - someone (usually an employed householder) to guarantee to pay the rent and other obligations under the tenancy if the applicant fails to pay. In the case of a guarantor, they must also be willing to undergo a credit check and sign a guarantor agreement.
If as an individual you have had credit problems you should always be totally open and honest about it, otherwise untruths in your statements will definitely go against you.
See a full article on this topic "So, What's the Score?
Note:
never rely totally on these standard
answers. Before taking action or not, always
seek professional advice with the full facts
of the case and all documents to hand.
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