When a prospective lender interrogates your credit file, they cannot see the same details as you are able to see when you get a copy of your report.
The lender will be given the history of your payments, records of insolvency proceedings and other records such as electoral role information. But they will not be given information about who you have currently borrowed money from, the outstanding balances or monthly repayment amounts.
The lender will compare the information about your current payment history and other records to their lending criteria. If you match their criteria for success, then it is likely that credit will be offered. If your score does not match their lending criteria, it is likely that your application will be rejected.
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06 September 2010 -
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Different lenders score your file in different ways
Lenders all have different ways of scoring your credit file. Filling out different lenders forms with the same answers will often produce different results.
Some lenders have a high threshold for scoring and may not accept your application if you have any traces of credit defaults. Other lenders just may not be in the lending “mood”. However, if a creditor is in the midst of launching a new card or loan package or they simply lend to people with poorer credit histories, they may accept your application where others reject it.
In these circumstances, beware of the interest you are being charged on what you borrow. Lenders who specialise in lending to people with poor credit histories (such as door stop lenders) will normally charge far higher interest than the typical high street rates.
So what is my credit rating?
The idea that everyone has a numerical “credit score” or rating which can actually be defined as good or bad is a misconception. There is actually no such thing as a numerical credt rating which can simply be compared to someone else's.
Each lender will accept or reject your application for credit based on comparing your payment history and other details against their lending criteria. Different lenders operate different payment history requirements and so some may be willing to lend where others are not.
