Credit Report Articles
If you are looking for a mortgage but you have been in a situation where you have a blemish on your credit history this section of the site may well help. Here you will find links to our credit report articles which explain the facts you need to know before making any kind of decision about which mortgage you should apply for.
Let’s start with the basics of credit reports
A credit report is the main source of credit reference information about individuals. They were for many years something of a mystery, but the rise of the internet and online access has meant that increasingly people can access their own credit report and make changes if necessary. This enables people to effectively see their own credit rating.
The Public Record
Electoral roll entries show the name of your local authority, the address that they holds for you, the names of people registered to vote at that address and the dates they were registered. It is a simple name and address check. Credit reference agencies update their records annually, but if you move home your local authority will tell them about your change of registration during the year. Court judgments are held on your credit report for six years from the date of the judgment. The information is obtained from Registry Trust, an independent organisation set up by the Lord Chancellor’s Department. Judgments paid within one month are removed from your records if the court issues a certificate of satisfaction. Judgments paid after one month are kept on the report but marked as ‘satisfied’ once the certificate has been issued. If declared bankrupt, credit reference agencies obtain this information from the official gazettes. It is kept on your report for six years after the date of the bankruptcy order.
Credit reference agencies hold 6 years’ worth of information about credit accounts from lenders. Some lenders provide information only on ‘defaults’, but most provide information for the entire account. Credit accounts can be classified as ‘settled’ (repaid), ‘active’ (open), ‘defaulted’ (in arrears or not paid), or ‘delinquent’(at least 3 months in arrears or late for more than 3 months within a year period). Credit agencies keep a record of settled accounts for six years from the final payment. The record will show how much money you still owe (default). Every record will include a status history over up to 36 months. Repossessions are also recorded.
Why it is important
A person’s credit report is vital to their ability to borrow money in any form. This doesn’t mean just your ability to borrow money such as getting a loan, but includes the ability to get a mortgage, maybe to rent, or even to get a mobile phone. Your credit report will affect your ability to get any form of credit. Your credit report will also affect the terms you are offered – a poor credit report may mean a higher interest rate, or other terms and conditions being applied that would not be applied to a borrower with good credit standing.
Everyone has the right to view the information in their credit report, in order to check whether the information held is accurate or not. If there are any errors, you are entitled to apply to have them corrected on your credit report. This is important.
There are 2 credit reference agencies who hold a credit report on individuals. The main two are Experian and Equifax.