Understanding Credit Report and Credit Standing

Credit scores are a numerical representation of how likely you handle your loans and credits. It is also a rating that tells the statistical data of your creditworthiness and an essential part when you’re planning to get a home or a cash loan.

Now, where does credit score came from and how you can check it. In the United Kingdom, there are three main credit reference agencies like Equifax, Experian and TransUnion, which is formerly known as Callcredit. These agencies are licensed to collect personal information on how you handle your credit habits and these data will be put into your credit report.

When an individual applies for a credit card or even a mobile plan, it is almost required to check your creditworthiness through a credit report. It provides information to lenders if you can manage your finances efficiently and a strong factor whether they will lend you or not.

For you to know your credit standing, there are some companies that might be able to help you for free. You probably noticed that there are companies out there that provides a detailed credit report such as ClearScore and others. You might also confuse them as a credit reference agency but we are here to clarify.

These companies don’t actually collect your data but show you the data from the three main credit reference agencies. Getting your hands on your credit report might be beneficial for you to understand if you’re in a good position when applying for a loan.

Can These Companies Affect Your Credit Score?

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These companies only show data from Equifax, TransUnion or Experian and don’t have the capability to change or tamper any information from your reports. However, if you notice any mistakes coming from your report, it might be best to contact one of the three main credit reference agencies to properly update your details.

The dispute process from these agencies may take up to 28 days to complete but in some cases, it can be resolved sooner than 28 days. This is necessary to understand if you are considering a personal or a housing loan but there are few discrepancies in your credit report.

If you opt-in to companies like ClearScore, lenders can actually see your information generated from their credit report. However, keep in mind that the listed information from these reports came from the three main credit reference agencies.

For further explaining things, these companies provide like a soft credit check that gives most of the vital information regarding your credit history. They are not that comprehensive compared to a real credit report from Equifax, TransUnion or Experian. Lenders will only get a partial part of your credit report meaning, they will only see important details that they need from your credit history but not all.

You’ll have to bear in mind that credit report is one of the most important factors when applying for a loan. However, Lenders also check your current job status such as your salary and if you are a regular employee of a company. They also consider your previous transactions with them and take them into consideration.

Cover Photo Credits: deserve.com