Information about Loan credit scoring:

The following information should help you to learn more about your rating and how you can improve it. Your ability to obtain loans in the future depends entirely on your credit score ; you are much more likely to be able to avoid debt management if you understand more about it you can improve and maintain it.

Your 'credit score'?

Your rating is a snapshot of your 'risk picture'; lenders can use your rating, at any given time, to assess whether they will get their money back. The higher your scores, the lower the risk to lenders.

What are the most important aspects to consider?

Firstly, and probably the most important, is your payment history; when you are late with repaying your loan it is documented so that lenders in the future can learn before they lend you money whether you are a reliable proposition. Next would most likely be the amount of credit owed, as the lender would want to ensure that borrowers are not overstretching themselves. The length of your credit history, any new credit arrangements and different types of credit are also factors. The order of these may vary between credit rating companies but essentially they will be the same.

How are credit scores calculated?

You will be given points for reliability in repayments, long term employment, inclusion on the Electoral Roll Listings, while adverse history such as late payments or CCJs (County Court Judgements) would result in a deduction of points. A mathematical formula is used to evaluate the information from your report, comparing it to patterns of past files. The score determines your future risk level.

Why do lenders use this method?

Credit rating scores provide an extremely useful guide to the risk undertaken by the finance companies, based on report data very often provided by Reference Agencies. Debt consolidation loans, which would normally be sought by people who have over committed themselves in the past, would require a high credit score.

Does everyone have a credit score?

Provided you have a bank or credit account that has been open for at least six months, or at least one that has been updated in the past six months, a report can be generated to calculate an accurate score. If there is information about fraud in one's file no calculation will be made, so in this instance there will be no credit score.

Is it possible to improve my credit rating?

Yes. You can keep your scores high by making sure you pay your all your bills on time, by keeping balances on cards and other loans as low as possible and by opening new accounts only when you need to. We hope this is useful for you.

LOAN CREDIT SCORING
Bestquote Money Supermarket
1 Chantry Court
Sovereign Way
Chester
Cheshire
CH1 4QA
01869 277023

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