| Before reading this article, here is a | | | | A Credit Score is something used by |
| number of definitions you may find | | | | loan, mortgage and credit companies to |
| helpful. A default is meant to refer to | | | | decide whether you qualify for a |
| where you have violated your contractual | | | | particular product. A Credit Score looks |
| requirements. When you have skipped your | | | | at your current and past financial |
| payment on a mail order account, for | | | | history, plus other personal details, |
| instance, they can file a Notice of | | | | and using mathematics, analyses what |
| Default on to your credit record. This | | | | type of 'risk' you are. |
| will have a negative effect on your | | | | By 'risk' we mean whether it is likely |
| credit report in the future when you | | | | you'll pay back the money borrowed; |
| would like to get additional borrowing. | | | | whether you can really afford the |
| A 'CCJ' is actually short for County | | | | repayments etc. |
| Court Judgement. A CCJ is a judgement | | | | Factors that can affect your score |
| established in a County Court against | | | | include: |
| someone who remains in debt to a third | | | | 1. late or missed payments in the past |
| party (another person or company) or | | | | 2. County Court Judgements and arrears |
| when they have not met the provisions of | | | | 3. How much you currently owe - even if |
| a credit agreement. A CCJ will establish | | | | all your payments are up to date |
| an appropriate repayment plan in order | | | | 4. You not being on the electoral roll |
| that the indebted person will eventually | | | | 5. Applying for lots of new credit |
| be able to payback the money they owe. | | | | accounts - this is viewed that you are |
| CCJ's are documented on official public | | | | someone getting into financial trouble |
| record and will have an effect on the | | | | 6. The length of your credit history |
| debtor's potential of securing any more | | | | 7. Financial associations - other people |
| credit for as much as 72 months. | | | | listed on your credit file that have bad |
| Equifax is a key UK credit reference | | | | debts can affect your credit rating |
| agencies. Equifax collects all your | | | | Why Your Score Matters |
| financial data from various sources to | | | | Your Credit Scores matters because it is |
| develop a report that presents your | | | | probably the most influential factor |
| personal financial history - i.e. your | | | | used by loan companies in deciding |
| credit report. If you fill out an | | | | whether they will give you a loan |
| application for credit, lenders will | | | | mortgage/other credit. |
| study your credit file to see your | | | | However, it is the lender who makes the |
| financial past. You can ask for a | | | | final decision and they may well take in |
| duplicate of your report at any point to | | | | to account reasons for past credit |
| see that all is in order. The Equifax | | | | problems. Apart from checking out your |
| internet site has a great deal of useful | | | | financial history, they will also need |
| advice on making proper financial | | | | to look at your occupation; whether you |
| decisions and protecting yourself from | | | | have any equity in your mortgage, your |
| fraudulent schemes. | | | | income and savings etc. |