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  |  Debt  |  Management  |  Credit scoring
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Credit scoring

Financial organisations use a statistical process called credit scoring to help them decide if they will lend you money. A credit score will normally be calculated by the lender, to assist them in deciding how creditworthy you are. Or to put it simply - if it's a safe bet for them to lend you the money

How does it work?
Lenders use credit reference agencies to give them information - such as your history of borrowing and repaying money, and any county court judgements held against you - to help them decide your credit score.

Credit reference agencies don't decide if you get the money, they just store information on people and supply it to lenders. This information comes from public sources, like the electoral roll and from other lenders. Each time a lender does a credit search on you, it will be noted on your file.

Lenders also look at the type of customer they want to lend money to and see if you match this.

How do you score?
There are lots of factors used in credit scoring, but lenders keep the details secret. The basic things they'll use to give you a credit score include:

  • Your credit history - how much you have borrowed in the past and your track record on paying it back
  • If you are on the electoral roll - generally you will need to be in order to get credit
  • The stability of your employment and housing status - generally the longer you have been in your current job and home the better

Where to go to check your credit information
You can ask a credit reference agency for a copy of your credit information file. You will need to send £2, details of your surname, full first name and title, and any addresses you have lived at during the past six years. The major agencies are Equifax and Experian.

Equifax plc
Credit File Advice Centre
PO Box 1140
Bradford
BD1 5US
www.equifax.co.uk

Consumer Help Service
Experian Ltd
PO Box 8000
Nottingham
NG1 5GX
www.experian.co.uk

What if I don't have a credit rating?
If you're not on the electoral role and have no credit history, you may not yet appear on a credit reference agency's files. If so, a lender may need more information before deciding whether to lend you money.

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