Mortgage Information - Credit Score Information

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Credit Act

Mortgages reside under the Consumer Credit Act 1974, where if you ask for a written quotation you must be given one, which sets out the main terms of the mortgage loan.

You will find information on this page to help you find out more about your credit score and credit rating and how you can improve it. Your score will be very influential in determining your ability to obtain any further credit. Whether for debt consolidation or just a loan and it is important you know how to improve and maintain your credit score in order to avoid the need for debt management.

What is a credit score?

This is how lenders calculate whether they will grant a loan or credit. A score is a snapshot of your credit risk picture at a particular point in time. The higher the score, the lower the risk to lender.

How are they calculated?

Every score is individual and calculated using a mathematical formula that evaluates all types of information on your credit report, compared to information patterns in millions of past credit files. The score can then identify your level of future credit risk.

What is the most important factor to consider?

Most credit score and credit rating agencies use five main factors to determine your credit score. Listed in priority order these are:

- Payment History,
- Amount owed,
- Length of credit history,
- New credit,
- Types of credit in use.

These will vary between credit rating agencies but the essentials will remain the same.

Why do lenders use scores?

Scores provide an extremely reliable and valuable guide to future risk based solely on credit report data. The higher your score the lower the risk to lenders when extending new credit to a consumer. Debt Consolidation Loans often require a good credit score, so do not wait till you have missed lots of payments to ask for help. The reason for this is that banks are far less keen to lend money to repay other people's debts than they are for a tangible item such as a car or household appliances.

Does everyone have a credit score?

Yes, any one who has had credit will have a credit file. For a score to be calculated on your credit report, the report must contain at least one account that has been active for six months or longer. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough recent information, in your report to compute an accurate score. Your score also will not be calculated if there is a fraud statement on your credit file or if all trade lines are disputed.

How often does the score change?

Your credit file is continually updated with new information from your creditors and companies you have applied for credit.

How can I improve Credit Score and Credit Rating Online?

Generally, people with high scores consistently:

- Pay bills on time.
- Keep balances low on credit cards and other revolving credit products.
- Do not have too many accounts open at one time.

Receive a good, regular income.

How often does the score change?

Your credit file is continually updated with new information from your creditors and companies you have applied for credit.

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