Credit Check - revealing your credit score
Before a lender will offer any finance to a consumer, they will run a credit check on the potential borrower first. A credit check is the process by which a consumers financial history is compared against a scoring system. Many factors and criteria are taken into account during the credit check process. These criteria include the length of time at the current address, security, employment, income, marital status, age and credit rating. The credit check will reveal if there is an adverse rating based on debt repayment history, therefore arrears, late and defaulted payments, missed payments and any County Court Judgments (CCJ), will all result in a lower rating. The higher the rating the more chance you have of getting finance. A low rating might be held against a consumer but in the end finance is lent at the lenders discretion and it is their decision entirely.
Credit Check Example -
UK Secured Loan For Home Improvement
If consumers want to extend their property or perform other home improvements, a UK secured loan would supply the finance to get the home improvement started and finished. A loan would ensure the improvement was finished quicker than say if you had to save up in order to finish the work. However a UK secured loan lender will perform a credit check before agreeing to grant any loan to the customer, a low rating revealed by the credit check means more of a risk for the lender and higher interest rates and tariffs could be charged for the secured loan. Unsecured loans and tenant loans could also be applied for the purpose of home improvement but interest rates would probably be greater, as the lender would not be able to use a property as security.
Credit Check Information.
A credit check revealing a low rating would be looked upon as a greater risk. A lender can see the fact that you have a poor credit rating, so you have defaulted on repayments in the past, so what's to say you will not do the same again. If a lender considers your rating to be too low they may refuse to lend you money, if they do decide to lend you finance they may charge you a higher interest rate to compensate for the greater risk they are taking on you. If you have a poor credit rating you should shop around, use the internet as you could still find a lender who is willing to finance you. It is possible to find UK lenders, perhaps online, who will grant UK finance even with adverse or poor credit scores so you should not despair. If you keep up monthly payments on such a loan they you will succeed in improving your credit rating for the future and you will then find it easier to obtain finance from lenders.