Are you a novice to the credit world and wonder what exactly a credit report is? Do you want to avail a personal loan in the UK but not sure from where to check your current credit score? Is your credit history negative and you want to improve it? Well, here we present a quick guide to the credit report in the UK. It will surely clear your all credit score related queries.
What exactly is a Credit Report?
A credit report is simply a financial report having someone’s credit history. It contains a numerical value (3-digit number) of a credit score which is usually used by banks, lending companies, and other financial institutions before approving a credit card or a loan application. So, if more is your credit rating then more will be chances of availing a credit card or a loan in the UK.
Besides the credit score, a credit report in the UK also contains the following information:
- Name, date of birth and current employer.
- Your current and previous address
- A complete list of your bank accounts including your loan, real estate, and credit card accounts.
- Repayment histories like full or partial payments, timely or late payments, missed payments, and defaults
- Joint account details if you have
- Fraud details if committed any
- County Court judgments, bankruptcies, and lien
- Social security number
Credit Bureaus in the UK
Basically, there are three credit agencies in the UK which release your credit report: Experian, Equifax, and Callcredit. They are also known as credit reference agencies or CRAs in the UK. These CRAs have your full credit history reports but information may vary from one to another.
Most of the credit rating companies offer 1-month free trial to their new customers. Once the free trial is over, you have to shell out 2-20 pounds towards the credit report charge. Please keep in mind, that the free credit history reports don’t carry complete information. On the other hand, the paid credit report services offer you:
- Unlimited access to your credit report
- Personalized advice on credit score improvement
- Fraud monitoring with alerts
- Dedicated customer support
What’s considered as a Good Credit Score in the UK?
Do you want to sure yourself that you have a good credit score? Well, there is no exact magic number to tell you that this much is a good credit score. Actually, there is a score range and it varies from one credit reference agency to another credit reference agency in the UK. For example, 600 is a very good score for Equifax but it is considered poor for Experian. Whatever is the case, you should strive for improving your credit score. Your one bad decision can cost your credit rating. Play smart but be safe while repaying loans and credit card bills.
What Affects your Credit Score Negatively?
Nobody wants to be in the category of bad credit history people. A bad credit history takes you to a point where lenders and bank start rejecting your loan and credit card applications. You feel helpless of your financial crunch and there is no way out. Defaults or continuously delayed repayments are big issues; even a small wrong step can affect your credit score. Here are some of the factors that can negatively affect your credit card score:
- Delayed payments, charge-offs, foreclosure, and bankruptcy
- Applying for multiple credit cards or loans
- Level of current debt
- Number of credit enquiries you make
- Full consumption of credit limit
- Mistakes in the credit report
- Being guarantor for a loan
Why is a Good Credit Score Important to your life?
In general, you need to have a good credit score for availing a personal loan, or a home loan, study loan, or any other kind of loan. Traditional banks and lenders in the UK give too much attention to your credit score before approving your loan application. A good credit rating helps you in getting a low-cost loan. And if your credit score is poor then you may get a loan but the traditional banks and lenders will charge you a very high-interest rate.
Bad Credit Loans – The Best Option for Poor Credit Borrowers
Are you in need of an urgent personal loan but your bad credit score is troubling you? Do you want to secure a car loan despite having a poor credit rating? There are various online lenders in the UK who offer bad credit loans with no guarantor at a competitive rate. Their loan approval process is quick and you don’t have to present any document or collateral your asset. All you have to do is to choose a reliable credit lender and fill the loan form online.
Top Tips to Improve your Credit Score
One should always try to improve his credit score even after there are multiple bad credit history loan options available in the UK market. Nobody will give you loans if you default repayments every time. You have to clean your credit image. Following are the smart tips to boost your credit rating
- Pay bills on time
- Don’t ultilise your full credit limit
- Decrease your debt and don’t revolve around it
- Set payment reminders
- Don’t borrow loans unnecessarily
- Use your credit card smartly
- Take a bad credit loan and repay on time
- Merge your multiple loans by availing a debt consolidation loan
- Close your unused credit card accounts
- Always take a no-objection certificate (NOC) from the lender/bank for every foreclosure of the credit/loan account.
- Stay at an address for a long time
The Bottom Line
A good credit rating reflects your financial health. Don’t let it deteriorate. Plan your monthly budget and stick to it. In the case of sudden expenses, try to borrow money from your friends, relatives or family members. Avail a loan, only when there is no hope of overcoming a financial crisis.
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