About Your Credit Status | Empire Finance Solutions For Everyday Needs

Your credit status is based on your credit history or credit report which is a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to credit score.

Your credit report is used by lenders  to determine an individual's or entity's credit worthiness or credit score. A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. A credit score is primarily based on credit report information, typically sourced from credit bureaus / credit reference agencies. Lenders use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, employers, and government departments employ the same techniques. Credit scoring also has a lot of overlap with data mining, which uses many similar techniques. With the adoption of risk-based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the annual percentage rate (APR).

It is very difficult for a consumer to know in advance if they have a high enough credit score to be accepted for credit with a particular lender. This is due to the complexity and structure of credit scoring which differs from one lender to another. Also, lenders do not have to reveal their credit scoring methods, nor do they have to reveal the minimum credit score required for the applicant to be accepted. Simply due to this lack of information to the consumer, it is impossible for him or her to know in advance if they will pass a lender's credit scoring requirements. If the applicant is declined for credit, the lender is also not obliged to reveal the exact reason why.

Do I have a clean credit status or "not clean"?

Good credit doesn't require a spotless payment history, but poor or adverse credit, once established, can be difficult to escape. If you have missed payments, are in mortgages arrears, had county court judgements, taken an IVA or gone through a bankruptcy then you will find you are typically classified has having an adverse, poor or bad crediting rating.

When you apply for a credit card, personal loan, or any other type of credit, the lender must decide if you are a good credit risk. Creditors do this by checking your background to see how you've paid debts in the past. A poor repayment history will hurt your ability to receive credit. Another term used in the industry in "non status", which refers to borrowers with impaired or low credit ratings who often find it difficult to obtain finance on normal terms and conditions.

If you are deep in debt and are applying for more credit, a creditor may consider you to be over-extended and deny your application, believing you may not be able to handle additional payments based on your income and existing obligations. When you apply for credit, each creditor may access your credit report. Their searches will be recorded on your report. Some creditors automatically reject an applicant if their credit report shows an excessive number of searches over a short period, believing from experience that good credit risks usually don't have many credit searches. A search can remain on your credit report for as long as two years.

In England and Wales (Scotland has its own legal system), County Court Judgments (CCJs) are legal decisions handed down by County Courts. Judgments for monetary sums are entered on the Register of County Court Judgments, which is checked by credit reference agencies to assess the credit-worthiness of individuals. CCJs will have an impact on your credit worthiness.

What is a credit report?
Your credit report is compiled using information from two main sources:

• Public records: electoral roll information, court judgments, individual voluntary arrangements and bankruptcies
• Information provided by lenders and financial institutions: credit accounts, credit applications and financial associations

The contents of your personal credit report can have a bearing on whether or not you are given credit. Your credit rating may also affect the interest rate you are offered by lenders, which could lead to more costly borrowing. Factors other than the information held on a credit report may contribute to a lending decision, such as the information you provide on your application form, but your credit report plays a key role. You have the right to view the information contained in your credit report to make sure it is accurate. If errors are found, you are entitled to apply to have them corrected.

The two principle credit scoring agencies are Experian and Equifax.  Both offer the above basic one off service however they each offer the alternative solutions below

Experian ( the UK's largest credit reference agency) offer a 30-day free credit report trial from their CreditExpert monitoring service from Experian . You will be able to see your Experian credit report as often as you like. You can also order your National credit score. To start your free 30-day trial and a free copy of your Experian credit report.

Equifax Credit Rating™ which gives you instant access to your credit score and to your Equifax Credit Report conveniently online. The key factor most lenders use to rate a potential borrower is your credit score. So it makes sense to know your personal credit score and to understand how lenders see you based on this score before you apply for credit. Equifax Credit Rating™ gives you just this.

What is the difference betweewn Equifax Credit Rating and the Statutory Credit Report

Features	Equifax Credit Rating™	Statutory Credit Report
Delivery	Your credit score and your Equifax Credit Report™ information is available immediately online. You may request it anytime, day or night.	The Statutory Credit Report is sent to you by post.
Availability	You may view the report and your score for 30 days online. The report and credit score can be printed for your records.	The report will be posted no later than 7 days from the time your request and payment are received by Equifax.
Credit Score	You are given your credit score and an explanation to help you understand how lenders view your credit history.	Not given
Ways to improve your credit score	Specific tips on how to improve your credit score as well as helpful links between your credit score and your credit report to help give you a clearer understanding of both.	None given
Performance Indicators	Score Performance Indicators are given to show how you rate in each category of information used to create your overall credit score	Not given
Customer Service	If you have any queries about your Equifax Credit Rating™ you can call our Customer Care team from Monday to Friday, 9am – 5pm	If you have any queries about your Statutory Credit Report you can call our Credit File Advice Line from Monday to Friday, 9am – 5pm
Advice Online	Clear, easy-to-understand advice is given for each item on your credit report, including its possible impact on your ability to obtain credit.	None available.
Additional Online Help	You will be directed to additional information to explain in more detail the impact of what you see on your report.	None available.
Accessibility of Information	We present your credit information in the Equifax Credit Report™ in a way that makes it easy to understand what aspects the lender uses to make a credit decision.	It is often unclear what information in the Statutory Credit Report is important to the lender. There may even be information in your Statutory Credit Report that has not been used to evaluate your financial standing.
Correcting Inaccuracies/Dispute Process	You can review your Equifax Credit Report™ immediately. If you believe any of the information is inaccurate, you can dispute this straight away.	You will need to wait until you have received your Statutory Credit Report in the post before you can check for inaccuracies and start any dispute process.
Price	£14.95	£2.00

Alternatively please look at our Finance Links page which may have alternative "Finance Solution" providers.