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Mar 25

How do you find out if you have bad credit?

Posted by:AutoMoney

Bad credit can stop you from obtaining credit cards, bank loans, mortgages, and even mobile phone contracts. However, contrary to popular belief, there is no such thing as your “credit rating”. When you apply for credit of any sort, the company will assess your application using their own “credit scoring” system – which is unique to them. There is no universal system used by all companies.

Credit scoringHowever, the companies will also use information about other credit products you have now, or have had in the past. They will obtain this information from a credit reference bureau. We understand that things can happen to put people in financial difficulty and this will be reflected in their credit record, so it is important to check your record on a regular basis.

Regular checking will identify any changes in the information held about you – if you are on a payment plan and settle the debt as agreed, you should see this reflected in your record and potential lenders will look at this more favourably.

And if you have CCJ’s that are paid off, these will be removed from your record in time, giving your application chances a boost. 

How to check your credit score

The three main credit reference bureaux are Equifax, Experian, and Call Credit. You can request a copy of all the information they hold on you, but you have to ask each one individually and a fee is payable. This will list all of the debts that have been lodged against your name, both current and closed. From this, you can then see any amounts registered as still owed. If necessary you can then contact the finance company or their representatives to arrange repayment of the debt.

You can also report any problems, issues or amendments to your credit report by contacting the bureau involved. If you do not recognise a debt, or believe that it is not yours for instance, you need to speak to them as a matter of urgency to get it removed or actioned.

Once you have checked your credit report, you will be back in control and in a better position to deal with any outstanding issues and arrears that you many have.

Borrow with confidence

Borrow with confidence

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Representative example: Loan amount £1000. Duration 18 months. Repayable by 16 monthly repayments of £170.42 and one of £198.42 (includes Bill of Sale registration fee of £28) commencing two months from the date of the loan. Total amount repayable £2925.14. Rate of interest 187% per annum fixed. Representative 350.5%APR. LOANS ARE SECURED ON YOUR CAR. The vehicle may be repossessed if you do not keep up the repayments.