CREDIT CHECK SCORE

What is a credit check score?

A credit check score is a numerical report which is based on a statistical analysis of an individual or companies credit files. A credit score is representation of the credit worthiness of an individual or a organisation.

A credit check score is based on credit reported information; this information is gathered and sourced from credit organisations.

A credit score is used by financial institutions, for example a bank or credit card company. These organisations use credit score to determine whether or not an individual or company is wothy of credit, maybe a loan.

The company will decide whether or not lending finances is a risk which may lead to bad debt. The credit check score will also determine the interest rate on the loan and the credit limit offered.

Credit scoring is also used by other organisation apart from banks and credit card companies. Organisations such as insurance institutions, mobile phone sales companies, employers and government departments also use credit check scores.

A credit check score comprises of:

Employment Details:  

Are you employed or self employed and how long you have been in that position. If you have been in a full time position for a number of years this will benefit you when the credit score is calculated.

Credit Agreements:

A conduct of existing credit agreemenets. For example the more credit agreements you have which are paid on time each month will again be a positive factor when the credit scoring is calculated.

Living details:

Length of time at your current address, are you a home owner, renting, council tenant, private tenant or living with parents?

Zip Code / Postcode Rating:

In the UK and the US there is a rating of postcode which is carried out.

Credit Defaults:

If you have CCJ's or have defaulted on any payments for loan, mortgages payments will also be taken into account when your credit check score is calculated.

Bank Account details: How long have you been with your current bank and have you fallen into overdrafts with out prior agreements.

Credit reports are held by credit scoring companies like Experian, Trans Union and Equifax. the companies collate information on individual and companies and is provided when requested. Your credit score can be obtained from these companies by application. It is a good idea to monitor your credit score if you are looking to obtain loans for houses or any other circumstance. In the US one free credit check score report is offered to everyone within in a 12 month period.