Common Questions
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For business credit reports select our Business Credit Reports option.
How do lenders decide if I am credit worthy?
Credit reference agencies do not decide whether to extend credit, they only provide the
credit report. The lender makes the decision, based on the credit report, but also on
their own internal guidelines and methods. Apart from the data in your credit report, they
also need to assess your financial status in relation to the credit you are applying for.
Each lender has its own methods, and the methods are subject to change. Most lenders also
ask for details and proof of income and expenditure, as well as looking at your credit
file for details of existing loans and credit. Lenders may calculate a short-term
debt-to-income ratio, where they calculate your present short-term debt payments
(excluding your mortgage), and divide the total by your total annual income. Some lenders
may refuse you credit if your short-term debt is more than 20% of your annual income.
Another method is to add up your monthly bills (not including rent or mortgage and
utilities) and divide the total by your gross income (before taxes) and here lenders may
looking for debt of under 35%. However, these are rough guidelines and subject to change,
and differences between lenders.
What data will lenders look at?
Many lenders will want to know the number of years you have worked at your present job,
the kind of work you do - they find professional and managerial jobs safer than manual and
clerical, self-employed is about mid-way on the risk scale and depends then upon status
checks on the business. They will look at the number and type of any negative entries in
your credit report, the amount of credit you currently have, savings and or current
accounts with the lender, length of time at your present address, is the telephone in your
own name, and whether you are a home owner. Your credit files are held by credit reference
agencies and some of this data may appear on your credit report.
I've been declined credit, what can I
do?
You cannot demand that anyone gives you credit. Most lenders will look at your credit
report before making their decision. The lender does not have to tell you exactly why they
declined your application, but they are required to be helpful in giving you some pointers
and if they used a credit reference agency to obtain a credit report on you, they must
tell you the name and contact details of the credit agency. You then have the right to
approach the credit reference agency directly, and ask them for a copy of your credit
report. There is no point is asking the credit agency why you were declined credit - the
agency cannot tell you that as they only hold your credit file - they do not make
recommendations or decisions. Once you have obtained your credit report you can then check
to make sure that there are no errors which may have adversely impacted on your credit
status. If your credit report shows adverse information which is true, then you cannot
remove it from your report. However, you may in some circumstances, be able to make a
comment which is recorded on your file in order to explain any circumstances which
surround the adverse entry.
I've found a mistake
on my credit report files, what can I do?
You will need to be able to demonstrate that the error is a factual error and not
just your opinion. For example if you are on the Electoral Roll at a different address
than the one shown in your credit report, you may need to obtain evidence from the Local
Authority where you are registered and contact the credit reference agency with this
information. Check with your Local Authority how often they update their records, and then
check with the credit reference agency when they last received updated records from the
Local Authority. If information about other people with whom you have no financial
connection appears on your files, you can ask the credit agency to disassociate yourself
from them. If there are other errors such as incorrect payment or credit information you
should contact the company that has provided the information to the credit agency and
attempt to establish the reason for the error and correct it. You should contact the
credit agency when you have details of the error and what needs to be corrected.
Different credit questions? Try
the Credit Report FAQ site detailed Credit Report help. |
