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Personal Credit Report Shows Your Potential Creditworthiness And Risk |
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You may have wondered about the denial of a new purchase or loan. Most people are mystified by credit ratings and clueless about their rights, the basis for lenders' decisions, calculations of credit scores or how to challenge and improve them. What's on your personal credit report can make the difference in getting credit or not. There are also other factors not included in your personal credit report that influence a lending decision also, for example the information on your application form. However your personal credit report is crucial. It is your right to check your personal credit report to verify accuracy. Any errors you come across can be corrected. The ability to check and challenge your personal credit report is vital. Not only will it influence a lending decision but even the interest rate you are offered by lenders can be affected resulting in more expensive or less expensive borrowing. Personal credit report is prepared by credit reference agencies that depend on information from two primary sources. The Public record includes electoral roll information, court judgments, individual voluntary arrangements and bankruptcies. Inputs from lenders and financial institutions like credit accounts, credit applications and financial associations also count. At the time of applying for a loan, the lender usually checks the information on your personal credit report with a credit reference agency. This helps in calculations of creditworthiness and risk. The calculations can differ between lenders. It's important to be aware that it's not the credit reference agency that offers comments or advice and nor does it know the kind of affect the information seen by the lender on his lending decision. The claim by the main credit reference agencies including Equifax is supply of factual information without good or bad but differing in creditworthiness levels to judge potential customers. On applying for credit, banks and building societies make lending decisions based on their records. The lender's credit scoring system also affects the decision. Credit reference agencies are not concerned with credit score and lack the information on the banks methods. A consumer has the right to view what's on your personal credit report due to the regulation of agencies by the office of fair trading and compliance with the Data Protection Act. Any dispute on a negative credit rating can be sorted out firstly with the provider. Another option is to contact the concerned agency with a notice of dispute, for an investigation to be carried out. Wrong information needs to be corrected and all lenders who checked your file in the last six months need to know about the errors. Negative entries could be genuine but you may still have good enough reasons like redundancy to explain your poor credit rating. You can request the agency to attach an explanation in a brief note with your personal credit report. Errors also occur when your family members live in the same address as you, more so with similar first names. This situation can be tackled by writing to inform the agency that you be disassociated with the person. The agency will first ensure through an investigation that it is not merely an attempt to offload a bad debt on your record. Of late agencies have stopped linking files to family members who lack a financial connection as in the case of a joint bank account or mortgage. Despite this, mistakes are inevitable. To have a look at your personal credit report, write to the credit reference agency that has your details. You can also view your personal credit report that determines lenders' credit decisions, by applying right away for a free online personal credit report from Experian. Experian also offers a 30-day free trial to their Credit Monitoring Service that has a number of benefits. --Weekly alerts reporting major changes in your personal credit report. These can warm you of potential fraudulent risks to be on your guard. --Unlimited credit reports whenever you want following trial membership --90-day money back guarantee --Financial tools and advice for managing credit effectively --Online quarterly newsletter on recent credit developments --Convenient ordering process to view credit score from Experian online |
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