Credit Rating and Credit Scores

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Credit ratings are a method of rating which is unique to each lender and is devised by them in order to rate a prospective borrower. It is not necessary that a lending company has to provide credit to an individual irrespective of his ratings. Similarly, there is nothing called a credit rating blacklist and since most of the parameters of evaluating a borrow is similar, a person with poor credit rating tends to face denial of credit in most places.

Banks tend to reject individuals with very good credit rating simply because they loose an opportunity to make money when they offer credit to someone who has always pays back on time. If you are looking to borrow money from a bank, then the best way would be enter into their system via a current account holding and let them come to you to sell other financial products.

Credit ratings are determined by the application form of the individual in which a number of financial questions relating to personal assets, family members and pay is requested. Banks and lending institutions tend to maintain records of previous transactions with them and refer it to determine customer type. Other than that, they also have access to Electoral Roll Information, financial data and court data which provides relevant information about the borrower. However, there are some records which banks and lending institutions do not have access to and that is medical and criminal history, savings account details, student loans, child support and any credit accounts opened before 1994.

You can even check your records both online and by postal request available with agencies and ensure that correct data is featured there. Online viewing can be done for free if you sign up for the agency’s free trial and then request cancellation once you have downloaded the required information. Correcting data available via these agencies are independent credit rating agency can help you improve you chances of getting loans without a headache by nearly 30%. Once you have the data, cross check all the factual and financial information mentioned there and if you spot an error then you need to correspond with the agency to get it corrected by suppling supporting documents.

Some tips on how to improve your credit rating include joining an electoral roll, limit the applications to loans, generate proof of financial stability and avoid getting caught in the circle of rejection. Do not hang on to credit cards you no longer use or accounts which are not operation. Make attempts to repair your credit and avoid late payments at all costs. Joint bank accounts and credit histories can hurt your credit rating. In your quest to repair your credit, do not attempt to choose illegal or so-called legal means to settle debts with the lender even when a CCJ has been served.