What can a creditor see on your credit report
When a lot of people apply for a short term loan, they instantly start to worry about what their credit score might look like and what potential lenders can see. If you have applied for a payday loan or short term loan before, will the lenders be able to see it? Is my credit score the only thing that is taken into account when deciding whether to provide or extend a short term loan? Your credit report can seem complicated and daunting at first, but it shouldn’t be feared. You’ll never escape lenders using your credit report when taking out any form of loan, you shouldn’t be scared of what they contain or how they’re used.
Firstly, the credit report is used as a tool for indentifying you. It features your legal name, home address, employment information, birth date, and national insurance number. While this does not go into caluclating your credit score, it can determine whether or not the information that you have given to the lender when you have applied for new credit is accurate, complete and truthful. Your employment information is also important, as most creditors will only provide you with credit if you have a means of paying it back.
One of the details on your report will be a history of your previous credit such as credit cards, a car loan or any other loans. It will also show any credit you currently have including the date it was started, the amount you borrowed, your current balance and a history of your recent payments. This will alos show if you’ve been late in making repayments which is important to lenders when assessing if you can afford to repay. If you’ve had trouble repaying in the past, it doesn’t mean you can’t borrow in future, just that the amount the lender will give you may be smaller to better fit your income.
There will also be a list of everyone who has run credit for you over the last two years, including voluntary inquiries (requests you have made) and involuntary inquiries (when a lender or other agency requests your report).
Public Records & Collection History
This information is also available from public records, and include bankruptcies, insolvency, home repossessions and unpaid debt or if you have ever committed fraud. This is all important information that lenders will use when it comes to reviewing your credit report to determine whether they are likely to provide you with additional credit such as a loan.
Ultimately, your credit score and report will tell creditors what types of credit you have used and whether or not your accounts are in good standing. This will help to show how dependant you are on credit, how reliable you are at repayments, and whether you have recently been sourcing new forms of credit. For example, if you apply for a short term loan this will leave a footprint on your credit report for 12 months – whether you are accepted or not.