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This guide strives to clear up any uncertainties surrounding your ability to receive credit, or inability as the case may be. Elsewhere on this guide to credit reports, you can receive some valuable tips on how to improve your credit rating as well as uncovered what lenders consider low risk borrowing.
However, in case you still have some unanswered questions, take a look at some common credit rating myths.
Once true but not anymore. Your family or friends’ credit reports are not reviewed by credit agencies when considering your applications. There is however a section on your credit report that will list anyone you share an account with or, say, a mortgage. In this instance it would be beneficial if your fellow account holder had a good credit rating.
As it is your individual circumstances that lenders are interested in, credit report companies only compile information that is related to you and not anyone else who may have lived at your property.
Note: When making an application lenders will look for addresses dating back three years to prove your identity.
Your credit score is not carved in stone and will vary from lender to lender. The reason being is that each lender uses a different method of calculating your risk factor, depending on your history, circumstances and the product you are applying for.
While you may have no current defaults or late payments to speak of now, previous faults will be kept on record for 3 years. Bankruptcy will be noted against your name for 6 years and the same applies for any court judgements. While you may be financially healthy now, your past misdemeanours will be recorded. However, fear not, there are ways to improve your credit score over time.
Lenders decide your credit score not the credit reference agencies. As previously discussed, the lenders make their own calculations based on information received from the credit reference agencies. Each lender calculates your credit score slightly differently, but it is the lender who sets your credit rating.
This is a well-circulated credit rating myth and is completely false. There is no blacklist so it is impossible to be on one. Difficulty in obtaining credit is likely to be because you have violated terms of credit agreements in the past – see causes of bad credit. However, you will not be disadvantaged due to gender, religion, race or ethnic origin.
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