Undertaking a credit check, due either to the requirements of a lender from whom you’re applying for credit or for your own information, can sometimes feel like a complex and confusing process. Whether you are simply asking for the basic information on your statutory credit file or looking for a more in depth analysis from credit check companies, getting your head around the various data sets and statistics that comprise your credit report such as payment histories, electoral roll data and credit score and ratings can be daunting to the untrained eye.
Another perplexing area to understand is the lay of the land in relation to what you need to pay for and when you have to pay for it. This is because the way credit check companies offer options that are – almost free, free for a limited period and paid for via a monthly subscription. Read more
What is a Credit Score?
Your credit score is a numerical value often between 0 and 700 assigned to you by lenders in order to ascertain the level of risk involved in lending you money and therefore how credit worthy you are. The higher your credit score the more likely you are thought to be capable of repaying your obligations which in turn, means that you should find it easier to access credit cards, loans and other financial products in the future.
What is Credit?
The word credit comes from the Latin word credere which means “to believe”. In this case the belief refers to the trust that a lender or creditor has to have in the debtor or borrower that they will repay their debt at a later date. Both parties get something out of the transaction. The borrower gets instant access to funds without having to work to save up the money gradually while the lender gets to levy additional charges such as interest and arrangement fees. Some organisations or services like My Credit Monitor will give the opportunity to carry out free online credit checks.
There are many practical uses for having credit nowadays which range from increased purchasing power by having access to large sums of money, protection against loss and damage on purchases made on a credit card and an ability to demonstrate a reputation for good borrowing and repayment habits, which should encourage other would be lenders to give you credit in the future on favourable terms. Read more