A credit check is an enquiry to check the customer’s history about credit payments.
Before issuing any credit card to the customer or before increasing the credit limits the worthiness of the customers is checked, whether he/she has the capability and enough resources to pay for the goods and services and later the credit card amount due with the interest rates.
These days several agencies have grown up, which carry out the credit checks of the new customers, via phone calls or personal interaction and charge certain amount of money for their services.
Even any personal and private agency or a lender can check you before deciding upon whether to lend you money or not. The reference agencies keep a record of your credits along with your personal details.
Credit scoring is done depending on your good credit card statement. Different companies have different norms to abide by, before providing you with monetary assistance. So if you are rejected by one particular company that does not mean that you will be rejected by everyone. But if your statement does not sound good enough, you are indeed a bad credit risk for the lender.
The agencies are registered with the government and they have the authority to catch you live at the address or contact information provided by you. They have the authority to keep details regarding any previous credit account held by you.
For your satisfaction you can always demand the Fact sheet from the agency involved or your lender, but will have to pay the fees what so ever. If you cannot understand the wordings of the fact sheet the plain language transcript can always be demanded. At times the agency can refuse providing the information if it is confidential.
If any information contained there in is wrong, you can always write back to them for correction and apply for the same credits again. This would help you in availing future credits too. This is called correction notice. This notice should be sent to all lenders who demand your information, so that your credit demands are not rejected.
“Again application for the credit can be rejected if anyone in your family has a bad credit statement.”
In that case you need to send a disassociation request to the agency specifying that you don’t have any financial association with the individual. This is essential to keep yourself far away from folly. If the agency keeps giving information about this member of your family to the lenders you can demand for the support from the Data protection registrar.
Credit check is generated from you previous payment history, which narrates how efficiently you have met your obligations. It depicts previous problems in your payment and since when did they disappear. If your accuracy in the payment is weak the credit score for you will be low. The next important thing taken into consideration is your current debt which gives a thorough picture of your current financial situation. Higher the amount of your debt, worst will be your credit score.
An individual, who already has lot of credit, would be tough to be trusted as a fair and risk free customer, as he would already be under monetary pressures from all ends. More the number of credits again reduce the credit score to some extent.
The credit report reveals only the information about your credit history and nothing about your personal details like current income, inherited property or your duration of service or retirement amount to be received. The credit score is important and is the first thing looked upon by the lenders hence it is important to maintain it.