The music has stopped. The merry waltz that was easy credit came to a grinding halt. The fat lady started singing and left planet Earth with a credit crunch hangover from hell. Trying to put the Cha back into your financial cha-cha-cha might just benefit from a little background information.
As you probably know, the major lenders have tried to make getting credit as easy as possible but it’s not for your benefit. No, the more money they lend the more money the finance houses earn in the form of interest rates. So, considering the myriad of ways to get fast cash, why are you still having problems getting your hands on it? In a nutshell: it’s your credit rating that’s holding you up.
A Quick Definition
- Credit file. This contains all the personal and financial information that’s known about you. Don’t worry, nothing else goes into this file but it is used to assess your…
- Credit rating. This is the part that is actually used to decide if you are eligible to get your hands on the lenders cash
Still Don’t Fully Understand Your Credit Rating?
If what you see in the line above was your response then this could be where some of your problems stem from. Keeping your finances in order is a sure way to keep your credit rating gleaming like a freshly polished sports car.
How Does This Rating Thing Work?
It’s a rating system. Think ‘Blind Date’ (if you’re old enough to remember that series)! When you apply for any kind of loan you are assessed. A background check will be conducted in order to assess you suitability to become a debtor. Ironic, eh?
When a check is run against your credit history, lenders will subject a number of areas of your life to a thorough probing (don’t worry, no alien abductions are involved).
What’s In My Credit File?
The following information is held in your credit file:
1. Personal information – Name, date of birth, address and past addresses.
2. Current financial commitments – Basically, this lists any credit-related commitments you have. Expect to see details such as your mortgage, mobile contracts, credit cards, loans, bank accounts amongst other things.
3. Payment records – Now you understand why keeping on top of your monthly payments is important. This section tells the lenders if you’ve neglected to pay on time (or never paid your debts). It also holds information on CCJ’s.
Only you and the lenders know if you’ve been a little bit naughty with your finances. Having CCJ’s or a bad credit isn’t the end of the world. It might feel like your credit rating up the creek without a paddle. If so, you need to know how to repair your credit rating. Before you, make sure you take a look at other tips and advice over http://moneysavingzone.co.uk/