Do you use a credit card or other form of credit to pay for good’s or services?

Credit is the life blood of fast moving consumer economy and the business workforce.

If a company is going to “give” you credit then they are going to want to know what your current and previous credit history is like.

This is where the credit score comes in.

A credit score is based on your historical borrowing and repayment history.

This also includes how often you have sought out additional credit.

When you seek credit a credit enquiry is run by the company that is going to issue the credit as a protective measure.

Lenders take this “credit score” or rating and use it alongside their own lending criteria to make a credit assessment.
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Internal credit teams review the data provided and look for trends in financial statements to determine your ability to repay issued credit.

Credit scores are calculated by specific credit agencies.

These credit reporting agencies include Equifax, Experian and Illion.

Each agency will create a score after it has calculated the following data:

Debt – past and present debts including any delinquencies in debt repayments.

Loans- existing loans that exist against your credit profile

Credit Cards – active credit cards and their balance

Credit Limit – Current credit limits and repayments

Bank Accounts – Existing and closed bank accounts

Defaults – court issued default documents and any default judgements

This helps them discovery things such as past bankruptcy.

There are many free credit checking sites and apps that let you check your score without making a full credit enquiry.

They will require the full information

– Full Name
– Date of birth
– Address
– Drivers licence

Scores are fairly quick and can be given within 5-10 business days.

Credit scores are flexible and not permanent. They are used to gain a better understanding of your current credit position.

By resolving unpaid debts and paying any new bills on time you can “fix” your credit score quickly.

Having a good credit score will help you land the best possible terms on your loan application. This can result in better rates and a lower monthly repayment.