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Keep a check on your credit history

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While income plays a huge part in determining how much money a lender will give you – beware, because past credit history is also significant. Janae Houghton investigates  
On-line credit reference checker MyCallcredit suggests potential borrowers should understand what’s on their credit file and just how lenders go about credit scoring them. Alison Nicholson, director, says: “Many people think the amount you can borrow is linked directly to how much you earn, but it’s much more complicated than that.’’

“Each lender is different in how it uses your credit file to work out a score. Understanding the information held about you and how lenders might use it, is the first step towards getting the best deals on credit you can,’’ she said.

Before applying for any sort of loan, be prepared that items from your credit history will affect you. The following details will be scrutinized; electoral roll information, any payment history you may have on mortgages, credit cards, loans, hire purchases and finance agreements.

County court judgements, amount owed and number of credit facilities, the length of your credit history, how many new types of credit you have applied for, the types of credit you use and salary details from the application form will also be taken into account.

MyCallcredit has these suggestions for keeping an eye on your credit file. Immediately register on the electoral roll when you move house, pay all your bills on time, keep credit card limits to a minimum, pay off debt rather than changing it around and only apply for new credit if you need it. 

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