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Mortgage Glossary
Credit Rating
 
Credit rating is perhaps the major ingredient and a key point when it comes to the process of lending. Whenever there is a high enough credit scoring present, the chances of being eligible for a certain loan are great. But what happens when there is a bad credit rating present? Most of the times, you will be not eligible for loans on very good terms. What you will notice, is that lenders do come with offers even if you have bad credit rating, but the major characteristics of the loan in this case are:
  • High overall cost of the loan
  • Typically, lower amounts of money
  • Pretty high interest rates
  • Very high late payment fees
So, if you have a bad credit rating, it is wise not to jump for the first loan offer which comes into your way, because it will most probably cost you too much. What you can do, even if you have a credit history which looks not so well (you have unpaid loans, late payments and other), you can make a thorough research and see what are the available options. Always carefully compare these offers, and see which offer comes with the most reasonable terms. Even if you will be paying a higher interest rate, and the general terms and conditions in your case will be more “rigid”, if you do your research correctly you will find the most appropriate solution given your financial situation.
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UK’s credit reference agencies which should be mentioned are the Experian, Call Credit and Equifax. These are the agencies which sometimes “unfortunately” keep too many records of your financial background. Some personal information and information about your past financial behavior (such as credit card payments history, history of a bankruptcy), can all be found registered at these agencies. These data are examined by the lender any time that you request a loan: the worst the outlook of your financial past, the lower the chances of being able to access a loan.

When your credit is ruined, you can start re-building it, so that you will be able at some point in the future to be eligible for loans on good terms. You can start rebuilding your credit history either by contracting a loan which you will be paying back on time, so that you can show good behavior, or, you can seek the advice of a credit/money manager who can redirect you towards a good solution. In order to be able to have access to your credit report, you can do it at one of the three major credit reporting agencies, by entering their website.
  • At Equifax, you are required to pay £6, 99 / month; prior to subscribing you can have access to a 30 day trial. If you find it convenient and helpful, then you can subscribe for the membership. Besides having access to your credit file, you will be receiving notices whenever there is a change in your credit file; you are constantly kept up to date.

  • If you check your credit rating at Experian, you will again receive a trial period of 30 days, and when this period ends you are required to pay a monthly subscription fee which will give you access to further information. At experian.co.uk, you will find that the layout is very user friendly, and that you can easily find what you are looking for. Much additional information is also present, such as news from the financial world, and also different business related services such as marketing (local market planning), payment processing, or customer management, which you will find particularly helpful.

  • If you opt for callcredit.co.uk, you will also find information regarding the company’s business profile, tips and advices on how you can keep your financial status well managed.
You need to know that it is always up to the lender whether he will make you eligible for their loan products. Each lender sets up own terms and conditions which must be met by the future client; however the ultimate and perhaps the most decisive part they take into consideration is your credit rating files. So, try to keep your credit score in a good shape if possible, because this way you will have access to a greater variety of lending options.